S&P 500 Treading Water at Resistance, Dollar Builds Topping Pattern

THE TAKEAWAY: The US Dollar may be carving out a topping chart formation, though confirmation is still pending. The S&P 500 is treading water below a familiar resistance level.

S&P 500 – Prices put in a Bearish Engulfing candlestick pattern below support-turned-resistance at a falling trend line set from mid-April, hinting a move lower is ahead. Initial support lines up at 1292.90, with a break below that exposing 1265.30. Trend line resistance is now at 1328.50, with a break above that targeting upside barriers at 1357.40 and 1392.10.

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL – Prices put in a bullish Piercing Line candlestick pattern above support at 81.07, the 23.6% Fibonacci expansion, hinting a bounce may be ahead. Positive RSI divergence reinforces the case for an upside scenario. Initial resistance lines up at 83.30, the 14.6% Fib, with a break higher exposing the June 7 high at the 87.00 figure. Alternatively, a break past support targets the 38.2% level at 77.33.

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD – Prices are testing resistance at 1616.23, the intersection of the 61.8% Fibonacci retracement and a falling trend line set from early March. A break above this boundary exposes the 76.4% Fib at 1637.35. The 1600/oz figure is acting as near-term support, with added reinforcement coming in from the 50% retracement at 1599.17.

Daily Chart - Created Using FXCM Marketscope 2.0

US DOLLAR – Prices continue to consolidate above support in the 10134-43 area, which now looks like the would-be neckline of a Head and Shoulders top formation. A break lower confirms the setup, initially exposing the 38.2% Fibonacci expansion at 10066 and implying an overall measured downside target at 9945. Near-term resistance lines up at 10220, the 61.8% Fib, with a breach higher targeting the 76.4% boundary at 10316.

Daily Chart - Created Using FXCM Marketscope 2.0

--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com

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