19:38 August 29, 2023
Stock indices are trading higher today with gains accelerating during US spot trading. This is due to the release of weak data from the United States. They are the Conference Board Consumer Confidence Index for August and the JOLTS Job Vacancies Report for July. The huge backlog in job vacancies is particularly important as it is one of the labor market indicators that the Fed monitors closely.
Hawkish bets in money markets were gradually reduced as US yields also fell following the release of the data. This led to a wait-and-see reaction on the stock markets, with the German DAX and the S&P 500 approaching important psychological marks.
DAX / DE30
German DAX futures (DE30) are trading at a 2-week high, just below the 16,000 point mark. The 16,000 to 16,050 area may offer some resistance as it is bolstered by the 50-session moving average (green line). However, a key resistance to watch for stands at 16,300 and represents a final hurdle before the all-time highs.
S&P 500 / US500
S&P 500 futures (US500) are testing the resistance zone below the 4,500-point level. This resistance zone is not only characterized by the 50’s session moving average and previous price reaction, but also serves as the shoulder line of a potential head and shoulders pattern. Failure to break the resistance zone and subsequent drop below the 4370 support (neckline) could spell a deeper decline.
Sources: xStation5 by XTB
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