The S&P 500 recorded a late bullish “hammer” on Friday’s close to hold above the key support group of 3,855/15. This reaffirms the potential for further short-term consolidation over the next few days, but the broader risk remains skewed to the downside, in the view of Credit Suisse analysts.
An eventual break below 3,855/15 may expose support at 3,505/00
“The S&P 500 has formed a bullish “hammer” candlestick reversal as a result, with short-term bullish momentum divergence now in place, and with US bond yields and the dollar stabilizing , all this reaffirms the potential for a consolidation phase in the short term.”
“Key resistance is seen at the 13-day falling exponential moving average, now at 4,002. While below this level, this will only be seen as a low-level consolidation, with medium-term bearish momentum remaining strong. Therefore, the risk of an eventual break remains high, with the next key support level in the price group lows around 3,723/3694 and eventually to 3,505/00.
“Key resistance remains at the aforementioned 13-day exponential moving average of 4,002. A break above this level would open a deeper corrective rally, with resistance at 4,091/4,128.”
Source: Fx Street
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