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Forex Analysis: S&P 500 Edges Higher, Threatening US Dollar Recovery

By , Currency Strategist
29 November 2012 04:09 GMT

THE TAKEAWAY: The prospect for a US Dollar recovery has been threatened as the S&P 500 pushed above initial technical resistance, warning of ebbing haven demand for the greenback.

US DOLLAR TECHNICAL ANALYSIS Prices are stalling at the bottom of a rising channel set from mid-September (now at 9971). A break below this boundary initially exposes the 38.2% level at 9945. Near-term resistance lines up at 9993, the 23.6% Fibonacci retracement, with a push above that aiming to challenge the November 16 high at 10071.

Forex_Analysis_SP_500_Edges_Higher_Threatening_US_Dollar_Recovery_body_Picture_5.png, Forex Analysis: S&P 500 Edges Higher, Threatening US Dollar Recovery

Daily Chart - Created Using FXCM Marketscope 2.0

S&P 500 TECHNICAL ANALYSIS – Prices edged above resistance at a falling trend line set from mid-October to challenge the 50% Fibonacci retracement at 1408.50. A break above this boundary exposes the 1424.90-30.90 area. The trend line, now at 1402.30, has been recast as support. A drop back below that aims for the 38.2% retracementat 1392.80.

Forex_Analysis_SP_500_Edges_Higher_Threatening_US_Dollar_Recovery_body_Picture_6.png, Forex Analysis: S&P 500 Edges Higher, Threatening US Dollar Recovery

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS Prices turned lower after putting in a Bearish Engulfing candlestick pattern below the 61.8% Fibonacci retracement (1748.70), dropping to test the 38.2% level at 1719.60. A further push downward below that exposes the 23.6% Fib at 1701.60, a barrier reinforced by a rising trend line set from late June (now at 1697.29). Near-term resistance lines up at 1734.15, the 50% retracement.

Forex_Analysis_SP_500_Edges_Higher_Threatening_US_Dollar_Recovery_body_Picture_7.png, Forex Analysis: S&P 500 Edges Higher, Threatening US Dollar Recovery

Daily Chart - Created Using FXCM Marketscope 2.0

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CRUDE OIL TECHNICAL ANALYSIS Prices broke support at a rising trend line support set from mid-October to expose the November 7 low at 84.04 as the next downside objective. A push below that initially exposes the 80-50-81.43 area. Alternatively, a reversal back above the trend line (now at 87.42) targets the 23.6% Fibonacci expansion at 89.48.

Forex_Analysis_SP_500_Edges_Higher_Threatening_US_Dollar_Recovery_body_Picture_8.png, Forex Analysis: S&P 500 Edges Higher, Threatening US Dollar Recovery

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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29 November 2012 04:09 GMT