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US Dollar Rebounds to Challenge Key Resistance Once Again

By , Currency Strategist
22 May 2012 03:55 GMT

THE TAKEAWAY: The US Dollar is staging an impressive recovery to once again challenge key resistance at the 2011 swing high. S&P 500 positioning warns of a deeper upswing.

S&P 500 – Prices put in a Bullish Engulfing candlestick and moved higher to challenge initial resistance at 1322.10, the 23.6% Fibonacci retracement. A break above this boundary exposes the 38.2% level at 1341.70. The May 21 low at 1290.30 marks near-term support.

US_Dollar_Rebounds_to_Challenge_Key_Resistance_Once_Again_body_Picture_5.png, US Dollar Rebounds to Challenge Key Resistance Once Again

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL Prices put in a Bullish Engulfing candlestick pattern above support at 90.49 and took out resistance at 92.51, a former support marked by the December 16 low. The bulls now aim to challenge the February 2 low at 95.41. The 92.51 level has been recast as near-term support.

US_Dollar_Rebounds_to_Challenge_Key_Resistance_Once_Again_body_Picture_6.png, US Dollar Rebounds to Challenge Key Resistance Once Again

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD Prices are probing lower after putting in a Doji candlestick below resistance marked by the 1600/oz figure as well as the 50% Fibonacci retracement level at 1599.17. A daily-close break below support at 1582.10, the 38.2% Fib, exposes the next downside objective at 1560.98.

US_Dollar_Rebounds_to_Challenge_Key_Resistance_Once_Again_body_Picture_7.png, US Dollar Rebounds to Challenge Key Resistance Once Again

Daily Chart - Created Using FXCM Marketscope 2.0

US DOLLAR Prices are recovering from support at 10078, the 61.8% Fibonacci expansion, to once again threaten resistance in the 10134-41 area marked by the 76.4% Fib and 2011 swing high. A break above this barrier exposes the 100% expansion level at 10241. Alternatively, a reversal through support exposes the 50% level at 10029.

US_Dollar_Rebounds_to_Challenge_Key_Resistance_Once_Again_body_Picture_8.png, US Dollar Rebounds to Challenge Key Resistance Once Again

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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22 May 2012 03:55 GMT