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US Dollar Recovery Threatens Trend-Defining Resistance Barrier

By , Currency Strategist
03 May 2012 03:20 GMT

THE TAKEAWAY: The US Dollar has recovered to test the boundaries of its recent down trend with scope to issue a meaningful breakout to the upside in the days ahead.

S&P 500 – Prices continue to consolidate between 1399.10 and 1409.00, the 61.8% and 76.4% Fibonacci retracement levels. A break higher exposes the late March to early April swing top in the 1419.90-1424.90 area. Alternatively, a push through near-term support targets the 50% Fib at 1391.20.

US_Dollar_Recovery_Threatens_Trend-Defining_Resistance_Barrier_body_Picture_5.png, US Dollar Recovery Threatens Trend-Defining Resistance Barrier

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL Prices put in a Harami candlestick pattern below resistance at a falling trend line set from late February, hinting a pullback may be ahead. Initial support lines up in the 104.90-105.15 area, marked by a horizontal barrier and the 50% Fibonacci retracement level. A break below here exposes rising trend line support at 102.42. Resistance is now at 106.03 and bolstered by the 61.8% Fib at 106.27.

US_Dollar_Recovery_Threatens_Trend-Defining_Resistance_Barrier_body_Picture_6.png, US Dollar Recovery Threatens Trend-Defining Resistance Barrier

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD Prices followed a Spinning Top candle below trend line resistance capping gains since late March with a push lower. Sellers face initial support at 1637.95, the 23.6% Fibonacci expansion, with a break lower exposing the 38.2% level at 1611.77. Trend line resistance is now at 1664.48.

US_Dollar_Recovery_Threatens_Trend-Defining_Resistance_Barrier_body_Picture_7.png, US Dollar Recovery Threatens Trend-Defining Resistance Barrier

Daily Chart - Created Using FXCM Marketscope 2.0

US DOLLAR Prices followed a bullish Morning Star candlestick pattern identified yesterday above trend line support set from late July 2011 with a push higher. The bulls are now testing resistance in the 9879-9906 area, a barrier reinforced by a falling trend line set from the April 5 swing high, with a daily close above it neutralizing downward pressure and opening the door for a larger advance. Near-term support is now at 9820.

US_Dollar_Recovery_Threatens_Trend-Defining_Resistance_Barrier_body_Picture_8.png, US Dollar Recovery Threatens Trend-Defining Resistance Barrier

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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03 May 2012 03:20 GMT