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S&P 500 Inching Lower as US Dollar Attempts to Clear Resistance

By , Currency Strategist
23 March 2012 03:55 GMT

THE TAKEAWAY: The S&P 500 is inching lower toward validating a bearish technical setup while the US Dollar continues to push up against resistance trying to break higher.

S&P 500 – Prices are edging lower after putting in a Hanging Man candlestick below resistance at the top of a Rising Wedge chart formation being carved out since November, hinting a move lower may gaining momentum. Initial support lines up at the 23.6% Fibonacci expansion at 1382.60. Near-term resistance is in the 1408.80-1418.20area, marked by the 38.2% expansion and the Wedge top.

SP_500_Inching_Lower_as_US_Dollar_Attempts_to_Clear_Resistance_body_Picture_5.png, S&P 500 Inching Lower as US Dollar Attempts to Clear Resistance

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL Prices continued to retest resistance-turned-support at the top of a recently broken Falling Wedge top having put in a Bearish Engulfing candlestick pattern below the 14.6% Fibonacci retracement at 108.32. It remains unclear whether the recent pullback represents a true reversal or merely a correction. A break of the 38.2% Fib at 104.75 would confirm the bearish scenario. Initial resistance now stands at 106.96, the 23.6% retracement.

SP_500_Inching_Lower_as_US_Dollar_Attempts_to_Clear_Resistance_body_Picture_6.png, S&P 500 Inching Lower as US Dollar Attempts to Clear Resistance

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD Prices continue to consolidate in a familiar range between resistance in the 1666.37-1677.05 area and the 38.2% Fibonacci expansion at 1638.49. A break higher exposes a familiar pivot at 1718.05 while a close below support clears the way for a move to the 50% expansion at 1590.82.

SP_500_Inching_Lower_as_US_Dollar_Attempts_to_Clear_Resistance_body_Picture_7.png, S&P 500 Inching Lower as US Dollar Attempts to Clear Resistance

Daily Chart - Created Using FXCM Marketscope 2.0

US DOLLAR Prices are stalling below resistance at 9997, the 23.6% Fibonacci retracement, having put in a Bullish Engulfing candlestick pattern above resistance-turned-support at a falling trend line set from the December 14 swing high. A daily close above this boundary exposes the 61.8% Fib expansion at 10071. Near-term support is at 9935, the 38.2% retracement for now.

SP_500_Inching_Lower_as_US_Dollar_Attempts_to_Clear_Resistance_body_Picture_8.png, S&P 500 Inching Lower as US Dollar Attempts to Clear Resistance

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 Ilya on Twitter at @IlyaSpivak

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23 March 2012 03:55 GMT