S&P 500 Price Analysis: FOMC minutes could be the final nail in the coffin

• S&P 500 is now dependant on the FOMC minutes. 
• Fed members have been leaning towards a faster pace of tapering, stocks could be pressured into the close.

At the top of the hour, we could finally see whether there has been a fundamentally hawkish shift at the Federal reserve amongst policymakers and whether they are advocating for a faster pace of tapering. These minutes are critical as we head into the blackout period that starts next Saturday before the December Federal Reserve meeting. This is the meeting where the Fed could speed up the tapering. 

The US dollar has already surged towards the 97 figure on the day following a crucial shift in tone from one of the more dovish policy makers, San Francisco Federal Reserve Bank President Mary Daly. She said that she would be open to accelerating the pace of the central bank's tapering of asset purchases if inflation remained elevated and jobs growth stayed strong.

"If things continue to do what they've been doing, then I would completely support an accelerated pace of tapering," Daly said during an interview with Yahoo Finance published on Wednesday.

Several Fed officials have said in recent weeks that the central bank should consider withdrawing its support more quickly to be better equipped to address elevated inflation.  If the minutes today confirm the basis, then this could be the nail in the coffin for US stocks, at least for the close and ahead of the Thanksgiving holidays. 

S&P 500 H4 chart

As illustrated, the price of the index has reached a 38.2% Fibonacci level and on a hawkish outcome, the stock market could react by falling. This would likely see the S&P 500 home in on the next level of support near 4,630 for a bearish close ahead of the long weekend.

If, on the other hand, the minutes are far more dependent on data, in line with the other comments fro Daly today, ''Daly said she was "open" to the idea, but would like to see more economic reports on inflation and hiring and discuss the approach with her Fed colleagues before deciding,'' then the stock market could react with a sigh of relief and close higher for the day with 4,710 on the radar. 

As for forex, the higher betas, such as the Aussie, will be dependent on the outcome of the stock market today and its reaction to the FOMC minutes outcome: AUD/USD Price Analysis: Looking vulnerable around the FOMC minutes, 0.7170s eyed