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Dollar Sets New Two-Year High, S&P 500 Aiming Lower

By , Currency Strategist
25 February 2013 04:44 GMT

THE TAKEAWAY: The US Dollar gapped to start the week, setting a new two-year high, while the S&P 500 is aiming lower after snapping its year-to-date up-trend.

US DOLLAR TECHNICAL ANALYSIS Prices gapped higher through resistance at 10413, the 150% Fibonacci expansion. Buyers now aim to challenge the 161.8% mark at 10452, with a break above that exposing the 176.4% Fib at 10501. The 10413 level has been recast as near-term support. A reversal back below that sees the next downside barrier at 10375, the 138.2% expansion.

Forex_Dollar_Sets_New_Two-Year_High_SP_500_Aiming_Lower__body_Picture_5.png, Dollar Sets New Two-Year High, S&P 500 Aiming Lower

Daily Chart - Created Using FXCM Marketscope 2.0

S&P 500 TECHNICAL ANALYSIS – Prices broke rising trend line support set from early January, completing a Bearish Engulfing candlestick formation. Initial support from here lines up at 1497.40, the 23.6% Fibonacci retracement. A drop below that targets the 38.2% level at 1476.90. The trend line – now at 1526.80 – has been recast as resistance, with a rebound back above that eyeing the February 20 high at 1531.60.

Forex_Dollar_Sets_New_Two-Year_High_SP_500_Aiming_Lower__body_Picture_6.png, Dollar Sets New Two-Year High, S&P 500 Aiming Lower

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS Prices are testing support-turned-resistance at the bottom of a falling channel set from October, a barrier reinforced by the 23.6% Fibonacci retracement at 1588.61. A break above that targets the 38.2% level at 1609.40. Near-term support is at 1555.00 – the February 21 low – with a turn back beneath that targeting the 1522.50-39.35 area marked by the December 29 2011 low and the May 16 2012 close.

Forex_Dollar_Sets_New_Two-Year_High_SP_500_Aiming_Lower__body_Picture_7.png, Dollar Sets New Two-Year High, S&P 500 Aiming Lower

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL TECHNICAL ANALYSIS Prices broke below support at 94.87, the 23.6% Fibonacci retracement, exposing the 38.2% level at 92.80. A further break beneath that aims for the 50% Fib at 91.13. The 94.87 mark has been recast as near-term resistance, with a turn back above that eyeing a falling trend line at 97.34.

Forex_Dollar_Sets_New_Two-Year_High_SP_500_Aiming_Lower__body_Picture_8.png, Dollar Sets New Two-Year High, S&P 500 Aiming Lower

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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25 February 2013 04:44 GMT