FXStreet notes that the S&P 500 extends its corrective setback and whilst economists at Credit Suisse see scope for a near-term bounce on Monday, the “ideal” scenario remains to look for a deeper corrective setback to test support at 3280/60. 

“The S&P 500 extends its corrective setback and although we see scope for a near-term bounce this morning, with a bearish ‘outside day’ in place from last week and with the market still below its 13-day exponential average, currently seen at 3410, the risk for a deeper setback remains. Key to the broader picture as to the severity of a setback remains seen from rates markets though and whether we see a more decisive move lower in 10yr US Breakevens and a base in 10yr US Real Yields, neither of which we have yet to seen, although the risk of which very much remains.” 

“Above 3369 would suggest there is scope for a move back to 3395, potentially 3410, but we look for this latter level to then ideally cap for a move back to 3307/03 ahead of our ‘ideal’ objective and what we look to be better support at 3280/59 where we will look for a floor – the 38.2% retracement of the rally from mid-May, 23.6% retracement of the entire rally from March, July high and 63-day average.”