The S&P 500 Index may yet see a deeper corrective rally to test a cluster of resistances including its 200-day moving average at 4456/75 (DMA). However, analysts at Credit Suisse expect this zone to remain a major barrier for a fresh move lower.

Scope for a deeper corrective rally

“Whilst near-term price support at 4328/23 holds the immediate risk is seen marginally higher for a sustained break and a deeper corrective rally.” 

“We see resistance at 4412 initially ahead of 4426/30 and then more importantly at the 200-day average, 50% retracement of the 2021/2022 fall and price/gap resistance at 4456/75. Our bias would then be for a more important cap here for a resumption of the broader downtrend.” 

“Below 4323 can ease the immediate upside bias, but with a move back below 4280 needed to see the risk turn lower again for a retest of the 4205/4199 major support cluster – the 23.6% retracement of the entire 2020/2021 bull trend and ‘neckline’ to a major top.”

This article was originally published by Fxstreet.com.Read the original article here.

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