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S&P 500 Under Pressure as US Dollar Finds Key Support Level

By , Currency Strategist
23 April 2012 07:35 GMT

THE TAKEAWAY: S&P 500 selling pressure is gaining steam as prices test through a short-term support level while the US Dollar may have found a base to launch an advance.

S&P 500 – Prices are testing through rising trend line support set from the April 10 low after putting in a Bearish Engulfing candlestick below support-turned-resistance at 1392.10. A confirmed break sees initial downside objectives at 1364.10 and 1357.40.

SP_500_Under_Pressure_as_US_Dollar_Finds_Key_Support_Level_body_Picture_5.png, S&P 500 Under Pressure as US Dollar Finds Key Support Level

8hr Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL Prices remain wedged between resistance at 104.90 and a rising trend line support set from mid-December, with a Bullish Engulfing candlestick pattern arguing for an upside bias. A break above 104.90 exposes falling trend line barriers at 105.21 and 106.42. Support is now at 101.58.

SP_500_Under_Pressure_as_US_Dollar_Finds_Key_Support_Level_body_Picture_6.png, S&P 500 Under Pressure as US Dollar Finds Key Support Level

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD Prices are testing below support at 1638.02, the 23.6% Fibonacci expansion, after putting in a Bearish Engulfing candlestick pattern below falling trend line resistance set from early March. A break lower exposes the 38.2% level at 1612.02. Trend line resistance is now at 1665.57.

SP_500_Under_Pressure_as_US_Dollar_Finds_Key_Support_Level_body_Picture_7.png, S&P 500 Under Pressure as US Dollar Finds Key Support Level

Daily Chart - Created Using FXCM Marketscope 2.0

US DOLLAR Prices are testing the intersection of a rising trend line set from early February and the bottom of a Triangle chart formation carved out over the past two months, a formation typically indicative of trend continuation (a bullish signal in this case). Near-term resistance lines up at 10007, the Triangle top. Alternatively, a break lower initially exposes 9885.

SP_500_Under_Pressure_as_US_Dollar_Finds_Key_Support_Level_body_Picture_8.png, S&P 500 Under Pressure as US Dollar Finds Key Support Level

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 April 2012 07:35 GMT