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Forex Analysis: US Dollar Follow-Through Lacking as S&P 500 Tumbles

By , Currency Strategist
09 November 2012 02:44 GMT

THE TAKEAWAY: US Dollar price action is curiously muted despite a sharp drop in the S&P 500 that might have been expected to buoy the standby safe-haven currency.

US DOLLAR TECHNICAL ANALYSIS Prices continue to flirt with 9963, the 38.2% Fibonacci retracement. Support is reinforced by a rising trend line set from the October 17 low (9933). A drop below this barrier aims for a support cluster in the 9861-85 area. Channel resistance is at 10006, with a break above that aiming for the 50% Fib at 10032.

Forex_Analysis_US_Dollar_Follow-Through_Lacking_as_SP_500_Tumbles_body_Picture_5.png, Forex Analysis: US Dollar Follow-Through Lacking as S&P 500 Tumbles

Daily Chart - Created Using FXCM Marketscope 2.0

S&P 500 TECHNICAL ANALYSIS – Prices took out support at 1394.30, the 38.2% Fibonacci retracement, with sellers now eyeing the 50% level at 1369.40. A push beneath that exposes the 61.8% Fib at 1344.50. The 1394.30 level has been recast as resistance, with a reversal back above that targeting the 1424.90-30.90 area.

Forex_Analysis_US_Dollar_Follow-Through_Lacking_as_SP_500_Tumbles_body_Picture_6.png, Forex Analysis: US Dollar Follow-Through Lacking as S&P 500 Tumbles

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS Prices are testing above resistance at 1732.33, the 23.6% Fibonacci retracement. A push above that targets the 1790.55-1802.80 area. Near-term support is at 1693.06, the 38.2% Fib, with a reversal back beneath that aiming for a rising trend line at 1681.23 followed by the 50% level at 1661.32.

Forex_Analysis_US_Dollar_Follow-Through_Lacking_as_SP_500_Tumbles_body_Picture_7.png, Forex Analysis: US Dollar Follow-Through Lacking as S&P 500 Tumbles

Daily Chart - Created Using FXCM Marketscope 2.0

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CRUDE OIL TECHNICAL ANALYSIS Prices failed to hold up after poking above the 38.2%Fibonacci expansion at 87.66, revering lower to challenge the 50% expansion at 83.76 once again. A break below that exposes 80.00 figure and the 61.8% level at 7978. Alternatively, a push back above the 87.66 aims for falling trend line resistance at 90.94.

Forex_Analysis_US_Dollar_Follow-Through_Lacking_as_SP_500_Tumbles_body_Picture_8.png, Forex Analysis: US Dollar Follow-Through Lacking as S&P 500 Tumbles

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 November 2012 02:44 GMT