Prior to the ‘risk-off’ seen overnight economists at Credit Suisse had already been looking for a correction lower. This ‘risk-off’ phase has the potential to exacerbate this risk and they are alert to the potential formation of a bearish ‘reversal week’, which would be seen confirmed on a close below 4673 today.
Resistance moves to 4703 initially
“We are alert to the formation of a bearish ‘reversal week’, which would be seen on a close below 4673 today. This would then reinforce our call for a correction lower for a fall to our objective at 4568/66 – the 38.2% retracement of the October/November rally – and probably more likely the 63-day average and price support at 4524/20, which we would look to ideally hold for now.”
“A weekly close below 4520 would warn of a more serious correction lower with support seen next at 4448/38.”
“Resistance moves to 4703 initially, with 4732/50 ideally capping.”