THE TAKEAWAY: S&P 500 technical positioning calls for a bearish reversal below the 2011 yearly high, hinting the safe-haven US Dollar is set to recover amid risk aversion.
S&P 500 – Prices put in a bearish Dark Cloud Cover candlestick pattern below resistance at 1376.10, the May 2011 top, hinting a move lower is ahead. Negative RSI divergence reinforces the case for a downside scenario. Initial support lines up at 1358.60 and is reinforced by a rising channel bottom at 1352.20. A break below that exposes the 23.6% Fibonacci retracement at 1331.40.
Daily Chart - Created Using FXCM Marketscope 2.0
CRUDE OIL – Prices broke resistance at 105.61, the 123.6% Fibonacci extension, with the door now open to challenge the 138.2% level at 106.81. The 105.61 level has been recast as near-term support, with a reversal back below that exposing 103.66 once again.
Daily Chart - Created Using FXCM Marketscope 2.0
GOLD – Prices pushed higher after putting in a Bullish Engulfing candlestick pattern above support 1714.60, with buyers once again testing resistance at 1763.00. A break above this boundary exposes the November 8 high at 1802.80.
Daily Chart - Created Using FXCM Marketscope 2.0
US DOLLAR – Unchanged from yesterday: “Prices remain wedged between resistance at 9863, the 50% Fibonacci retracement level, and the 23.6% Fib expansion at 9788. A break higher exposes the 61.8% retracement at 9908 while a push through support targets the 38.2% expansion level at 9732.”
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
To contact Ilya, e-mail ispivak@dailyfx.com. Follow me on Twitter at @IlyaSpivak
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