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Forex Analysis: US Dollar Selling Pauses as S&P 500 Warns of Weakness

By , Currency Strategist
31 January 2013 06:11 GMT

THE TAKEAWAY: US Dollar has stalled after reversing downward from technical resistance while the S&P 500 has produced signs of a looming reversal above the 1500 figure.

US DOLLAR TECHNICAL ANALYSIS Prices turned lower as expected after putting in a Shooting Star candlestick below resistance marked by the 61.8% Fibonacci expansion (10181) and a rising channel top (10196). Sellers have now cleared the 50% level at 10153, exposing the 38.2% Fib at 10124. A further push beneath that aims for a rising trend line 10106. The 10153 mark has been recast as near-term resistance.

Forex_Analysis_US_Dollar_Selling_Pauses_as_SP_500_Warns_of_Weakness_body_usd.png, Forex Analysis: US Dollar Selling Pauses as S&P 500 Warns of Weakness

Daily Chart - Created Using FXCM Marketscope 2.0

S&P 500 TECHNICAL ANALYSIS – Prices put in a Bearish Engulfing candlestick pattern, hinting a move lower is ahead. Initial support is in the 1470.80-74.90 area, marked by the September 14 high and the 23.6% Fibonacci retracement. A break below that targets the 38.2% level at 1446.20. Near-term resistance is at 1510.60, the January 30 high.

Forex_Analysis_US_Dollar_Selling_Pauses_as_SP_500_Warns_of_Weakness_body_spx.png, Forex Analysis: US Dollar Selling Pauses as S&P 500 Warns of Weakness

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS Prices pushed higher as expected after completing a bullish Morning Star candlestick pattern above major rising trend line support dating back to mid-May (1653.31). Near-term resistance is at 1690.39, the 38.2% Fibonacci retracement, followed by the 1700/oz figure and a channel top at 1700.68. Alternatively, a reversal below support targets the January 4 low at 1625.69 and the falling channel bottom at 1602.09.

Forex_Analysis_US_Dollar_Selling_Pauses_as_SP_500_Warns_of_Weakness_body_xau.png, Forex Analysis: US Dollar Selling Pauses as S&P 500 Warns of Weakness

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL TECHNICAL ANALYSIS Prices cleared resistance at 97.41, exposing the 100.00 figure and the September 14 high at 100.40. Negative RSI divergence warns of ebbing bullish momentum however and hints a reversal may be brewing. The 97.41 level has been recast as near-term support and is reinforced by a rising trend line at 96.91. A break below the latter level targets 94.61.

Forex_Analysis_US_Dollar_Selling_Pauses_as_SP_500_Warns_of_Weakness_body_wti.png, Forex Analysis: US Dollar Selling Pauses as S&P 500 Warns of Weakness

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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31 January 2013 06:11 GMT