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US Dollar Continues to March Higher as S&P 500 Treads Water

By , Currency Strategist
24 May 2012 05:15 GMT

THE TAKEAWAY: US Dollar continues to defy overbought technical studies to push higher but the S&P 500 is conspicuously lacking of direction near familiar levels.

S&P 500 – Prices continue to tread water between 1292.90 and 1322.10, the October 27 high and the 23.6% Fibonacci retracement, respectively. A break higher exposes the 38.2% Fib at 1341.70. Alternatively, a daily close below support initially exposes 1272.60.

US_Dollar_Continues_to_March_Higher_as_SP_500_Treads_Water_body_Picture_5.png, US Dollar Continues to March Higher as S&P 500 Treads Water

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL Prices continue to test resistance-turned-support at 90.49, with a break lower initially exposing the 61.8% Fibonacci retracement level at 88.54. Near-term resistance lines up at 92.51, a former support marked by the December 16 low, with a push above that targeting the February 2 low at 95.41.

US_Dollar_Continues_to_March_Higher_as_SP_500_Treads_Water_body_Picture_6.png, US Dollar Continues to March Higher as S&P 500 Treads Water

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD Prices recoiled from resistance marked by the 1600/oz figure as well as the 50% Fibonacci retracement level at 1599.17, taking out support at 1582.10 marked by the 38.2% level and exposing the next downside objective at 1560.98. A break below this boundary exposes the 1522.50-1532.45 area. The 1582.10 level is acting as resistance.

US_Dollar_Continues_to_March_Higher_as_SP_500_Treads_Water_body_Picture_7.png, US Dollar Continues to March Higher as S&P 500 Treads Water

Daily Chart - Created Using FXCM Marketscope 2.0

US DOLLAR Prices continue to push higher after taking out resistance in the 10134-41 area marked by the 76.4% Fibonacci expansion and the October 2011 swing high. The bulls target the 100% level at 10241 as the next major upside objective. RSI studies are at their most overbought since prices set the last major top however, warning that the treat of a pullback is significant. The 10134-41 region is now recast as near-term support.

US_Dollar_Continues_to_March_Higher_as_SP_500_Treads_Water_body_Picture_8.png, US Dollar Continues to March Higher as S&P 500 Treads Water

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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24 May 2012 05:15 GMT