The S&P 500 held its March-to-October uptrend line this week, bouncing off support at 7,617 ahead of Friday's US jobs report. Treasury yields briefly touched a 2002 high and the dollar climbed to a 17-month peak as traders positioned for a payrolls print expected to show slower hiring.
S&P 500 tests but holds its uptrend line
The S&P 500 tested but bounced off its uptrend line at 7,617, a trendline stretching back to March. While the level holds, the index may revisit the 7,750-to-7,780 region, with a break above the mid-August peak at 7,816 marking a new record.
Good support below this week's low sits between the June-to-July highs and the 10 September low, at 7,581-to-7,573. A slip through that band opens the door to a retest of the September low at 7,508.
The short-term outlook stays bearish while the index trades below the 30 September high at 7,723. The medium-term picture is neutral with a bullish bias as long as the S&P 500 holds above the September low at 7,508.
Jobs report and yields set the macro backdrop
September non-farm payrolls are expected to show employment growth slowing to around 90,000, down from 162,000 in August, while unemployment is forecast to hold at 4.1%. The release will be watched closely for signals on the Federal Reserve's next policy move.
The US 10-year yield briefly climbed to 5.34%, its highest level since 2002, before retreating toward 5.25%. Higher oil prices, persistent inflation concerns and fiscal pressures continue to weigh on global bond markets, while Asian equities fell ahead of the US data.
Meanwhile, the dollar extended its advance to a 17-month high as investors favored the greenback amid the global bond sell-off and concerns over European fiscal risks.
Source: IG – News and trade ideas
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