With US futures weighed down today amid higher Treasury yields, the mood isn't looking good ahead of European trading. That said, Wall Street will be the main focus as the S&P 500 is running into a test of key technical levels once again this week:
The 200-day moving average (blue line) at 3,940 is the key line to watch now and a break below that will set up a potential test of support at the 100-day moving average (red line) at 3,921 as well as the 38.2 Fib retracement level of the swing higher from October at 3,926.
Essentially, the region between 3,921 to 3,940 is a major area to watch for the S&P 500 and equities sentiment at the moment.
If we do see a breakdown in the technical levels outlined, that is likely to see sellers impose themselves further with more downside momentum set to build.
Alongside a move above 4% in 10-year Treasury yields, that will be a big tailwind for the dollar if the above conditions fall into place.
