- US stock futures slip ahead of key jobs data release.
- Nasdaq and S&P 500 face crucial technical tests today.
- Meanwhile, German DAX holds bullish trend despite December pullback.
- Kick off the new year with a portfolio built for volatility - subscribe now during our New Year’s Sale and get up to 50% off on InvestingPro!
US stock futures retreated on Friday as traders adopted a cautious stance ahead of the highly anticipated US jobs data.
With fresh clues on the economy and the Fed's interest rate path in the offing, market sentiment has grown tentative. As of writing, Nasdaq 100 futures dropped 0.3%, and S&P 500 pulled back 0.2%.
Expect increased volatility today as the US labor market data is released, with larger-than-expected surprises likely to spark volatility.
However, traders are especially focused on the upcoming political shift in the coming weeks - the inauguration of Donald Trump and the potential for a Republican majority, which is poised to dominate market attention.
With that backdrop, let's take a look at how major US indexes are faring ahead of the last trading day of the week.
Will the Nasdaq Hold Key Support?
After hitting a historic high near 22,400 points, the Nasdaq 100 entered a consolidation phase, forming a descending right-angled triangle.
According to technical theory, this pattern signals a potential downturn if the lower boundary, located near the psychological level of 21,000 points, is breached.
A breakdown here could open the door to further declines, targeting the next support at 20,000 points.
S&P 500 Faces Renewed Pressure at 5,850 Points
The S&P 500 has encountered persistent pressure at the 5,850-point level, where a previous failed breakdown attempt occurred.
Given the weaker rebound compared to earlier rallies, the market looks poised for another test. A sustained break below this level would confirm a head-and-shoulders pattern, with a target of 5,670 points.
However, the broader uptrend remains intact, even if a corrective move materializes.
DAX Trend Remains Bullish Despite December Correction
The DAX quickly rebounded from a mid-December correction, almost completely erasing the losses. Buyers defended the key support at 19,700 points, signaling a continuation of the bullish trend.
The index is now eyeing 21,000 points, with the uptrend remaining intact. A drop below both the support level and the trendline would raise alarms, opening the door for a deeper pullback toward 19,000 points.
With the market gearing up for critical economic data, all eyes will remain on these key levels as traders position for potential breakthroughs or reversals.
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