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S&P 500 Continues To Slide; Swiss National Bank Saves Euro From A Nosedive

By FxPro Financial Services Ltd (Alexander Kuptsikevich)ForexOct 13, 2021 06:27AM ET
www.investing.com/analysis/sp-500-continues-to-slide-swiss-national-bank-saves-euro-from-a-nosedive-200604917
S&P 500 Continues To Slide; Swiss National Bank Saves Euro From A Nosedive
By FxPro Financial Services Ltd (Alexander Kuptsikevich)   |  Oct 13, 2021 06:27AM ET
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The US market worked in full force yesterday, with the debt market returning to action after the long weekend.

Equity and bond markets remain under pressure as investors price in the Fed’s monetary policy tightening.

S&P 500 Outlook

Since the beginning of September, there has been a clear downward trend in the S&P 500. Unlike the correction episodes of recent months, we see what appears to be a reluctant slide. 

This has the potential to be a bull-trap. But, the bulls can buy on downturns, betting on the rebound after a correction.

The 50-day moving average has been a resistance since the end of September, although it was a strong support before. 

It would not be surprising if the short-term buyers lose their support in the coming weeks or even days, accelerating the corrective momentum and allowing the S&P 500 to pull back from the current 4340 to the 200 SMA, which is now near 4170.

Downside resistance has formed in S&P 500.
Downside resistance has formed in S&P 500.

EUR/USD Outlook

In the most traded currency market pair, there is an even more persistent downward trend. The EUR/USD has rolled back to 1.1550 from the local peak at 1.1900 in early September, experiencing a decline. 

Since late September, the RSI on the daily charts has hovered near 30, an oversold area, but that hasn’t stopped the single currency from rewriting its lows from last July.

As we pointed out earlier, there are no significant support levels in the pair up to the 1.14000 area. However, locally, one may notice buying on declines.

A consolidation above 1.1600 by the end of the week may allow us to talk about breaking the descending trend and launching a broader rebound, but the bulls will have to try harder for that.

EUR/USD has been declining since early September.
EUR/USD has been declining since early September.

EUR/CHF and USD/CHF Outlook

The Swiss National Bank (SNB) has prevented the CHF from rising against the Euro, but it might make a u-turn.

The EUR/CHF pair has formed a “floor” near the level of 1.07, approximately where it was in August. The SNB predominantly monitors the CHF against the Euro but doesn’t neglect the USD either.

The USD/CHF has been in an uptrend since August. So the intensity of the interventions against the Euro might weaken, reducing the support for the single currency.

In any case, one hardly can expect the Swiss National Bank to reverse any meaningful long-term trends.

EUR/CHF refuses to fall below 1.07.
EUR/CHF refuses to fall below 1.07.

S&P 500 Continues To Slide; Swiss National Bank Saves Euro From A Nosedive
 

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S&P 500 Continues To Slide; Swiss National Bank Saves Euro From A Nosedive

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