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SPX500_m sees slight recovery, back above 4250

SPX500_m sees slight recovery, back above 4250

The S&P 500 continues to recover after almost reaching the psychologically important 4200, before bouncing off the widely-followed 200-day simple moving average (SMA).

Markets apparently reacted to the weaker ADP Nonfarm Employment Change report (89K vs 153K expected) on Wednesday, October 4th.

The slightly weaker economic data has shifted market’s expectation of another interest rate hike by the Fed, which has dropped to 20.4% (from 28.2%) for November and to 37.5% (from 46.7%) for December respectively.

This has translated into a weaker USD, providing the SPX500 bulls a moderate upward momentum.

More US jobs data incoming

Investors are now looking forward towards the weekly initial jobless claims reading to be released later today (Thursday, Oct 5th), along with US nonfarm payrolls data on Friday, Oct 6th.

Any significant deviation from the expected values might force the Fed to resort to increasing rates one more time this year.

From a technical perspective:

  • A consolidation pattern might form between 4263.8-4300.0 as investors prepare themselves for a next Fed’s meeting on November 1st
  • 21-period SMA is still positioned below the 100-period SMA, which may indicate still-strong selling pressures
  • The 61.8 Fibonacci level may prove to be a strong resistance for the SPX500 bulls trying to recover further from recent losses

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