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US Dollar Strength Returns But S&P 500 Still Noncommittal

By , Currency Strategist
09 May 2012 00:25 GMT

THE TAKEAWAY: The US Dollar regained its upward drive, moving higher to test trend-defining resistance, but the S&P 500 continues to stall at a familiar support level.

S&P 500 – Prices put in a pair of Hammer candlesticks above support at 1363.50, the 76.4% Fibonacci expansion, hinting a bounce may be ahead. Initial resistance lines up at 1392.10. Alternatively, a push through support exposes the 1339.40-1347.40 area, marked by the 100% Fib expansion as well as the 38.2% retracement of the rally from the December 19 2011 swing low.

US_Dollar_Strength_Returns_But_SP_500_Still_Noncommittal_body_Picture_5.png, US Dollar Strength Returns But S&P 500 Still Noncommittal

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL A selloff triggered after the appearance of a Harami candlestick pattern identified last week found interim support in the 95.78-96.56 area marked by a horizontal barrier in play since early November 2011 as well as the 100% Fibonacci expansion. A pair of Hammer candlesticks hints that a bounce may be ahead. Initial resistance lines up at 98.89, the 76.4% expansion, with a break above that exposing the 61.8% level at 100.33. Alternatively, a push through support targets 92.51.

US_Dollar_Strength_Returns_But_SP_500_Still_Noncommittal_body_Picture_6.png, US Dollar Strength Returns But S&P 500 Still Noncommittal

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD Prices completed the Triangle chart formation carved out since late March – a setup indicative of bearish continuation – and took out support at 1661.75 marked by the 38.2% Fibonacci expansion. Sellers now aim to challenge the 50% Fib at 1591.00. Longer term, the Triangle pattern implies a measured downside objective at 1548.21. The 38.2% level has been recast as immediate resistance.

US_Dollar_Strength_Returns_But_SP_500_Still_Noncommittal_body_Picture_7.png, US Dollar Strength Returns But S&P 500 Still Noncommittal

Daily Chart - Created Using FXCM Marketscope 2.0

US DOLLAR Prices overturned a Shooting Star candlestick identified yesterday to neutralize the threat of a pullback, with the bulls once again pressing up against resistance at a falling trend line established from mid-March (now at 9967). A break above this barrier exposes the April 5 high at 10047. Initial support remains at 9906.

US_Dollar_Strength_Returns_But_SP_500_Still_Noncommittal_body_Picture_8.png, US Dollar Strength Returns But S&P 500 Still Noncommittal

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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09 May 2012 00:25 GMT