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US Dollar Chart Setup Favors Weakness, S&P 500 Breaks Support

By , Currency Strategist
03 June 2013 06:09 GMT

THE TAKEAWAY: US Dollar technical positioning hints prices are vulnerable to deeper losses. Meanwhile, the S&P 500 has edged past the first layer of key chart support.

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US DOLLAR TECHNICAL ANALYSIS Prices moved lower as expected, with prices taking out rising channel support after completing a Bearish Engulfing candlestick pattern. Sellers now aim to challenge the 38.2% Fibonacci retracement level at 10694, with a move beneath that exposing the 50% Fib at 10638. Channel support-turned-resistance is now at 10804.

Forex_US_Dollar_Chart_Setup_Favors_Weakness_SP_500_Breaks_Support_body_Picture_5.png, US Dollar Chart Setup Favors Weakness, S&P 500 Breaks Support

Daily Chart - Created Using FXCM Marketscope 2.0

S&P 500 TECHNICAL ANALYSIS – Prices broke support at 1637.00, the 14.6% Fibonacci retracement, exposing the 23.6% Fib at 1605.90. A further push below that eyes the 38.2% Fib at 1555.50. Near-term resistance is at the May 22 high (1687.40), a barrier reinforced by the underside of a broken rising trend line set from mid-April (now at 1682.00).

Forex_US_Dollar_Chart_Setup_Favors_Weakness_SP_500_Breaks_Support_body_Picture_6.png, US Dollar Chart Setup Favors Weakness, S&P 500 Breaks Support

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS Prices put in a Bearish Engulfing candlestick pattern, hinting a turn lower may be ahead. Near-term support is at 1386.51, the 23.6% Fibonacci retracement. A break below that targets the 38.2% level at 1364.62. Initial resistance is at 1421.90, the May 31 swing high.

Forex_US_Dollar_Chart_Setup_Favors_Weakness_SP_500_Breaks_Support_body_Picture_7.png, US Dollar Chart Setup Favors Weakness, S&P 500 Breaks Support

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL TECHNICAL ANALYSIS Prices appear to have completed a Head and Shoulders top chart formation. Sellers initially eye the May 1 low at 90.09 from here, but the H&S setup implies a measured downside objective at 88.58. Neckline support-turned-resistance is now at 92.71, with a move back above that eyeing the May 28 highat 95.89.

Forex_US_Dollar_Chart_Setup_Favors_Weakness_SP_500_Breaks_Support_body_Picture_8.png, US Dollar Chart Setup Favors Weakness, S&P 500 Breaks Support

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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03 June 2013 06:09 GMT