S&P 500 Index: Sggressive reversal lower to retest the 3855/15 key support – Credit Suisse

FXStreet Insights Team FXStreet

The S&P 500 fell sharply on Wednesday. Economists at Credit Suisse look for a retest of the 3855/15 support cluster.

Break under 3855/15 to open up 3505/00

“We look for a retest of our core objective of the 3855/15 support cluster – the 38.2% retracement of the 2020/2021 uptrend, 23.6% retracement of the entire uptrend from the GFC low, 61.8% retracement of the rally from October 2020 and price support.”

“Whilst a fresh hold at 3855/15 should be allowed for, downside momentum stays seen strong and the risk of a direct break below is seen highly elevated. If seen this would suggest the downtrend is resuming quicker than expected, with the next key support level at the cluster of price lows around 3723/3694 and eventually down to 3505/00.”

“Key resistance stays at the aforementioned 4062/91 13-day exponential moving average, downtrend and recent high. A break above here would reassert thoughts for a consolidation phase, with resistance then at 4123/28.”

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FXStreet Insights Team

FXStreet

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