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Dollar Selling Tipped to Continue, SPX 500 Aiming Above 1700

By , Currency Strategist
12 September 2013 03:20 GMT

Talking Points

  • US Dollar Support Break Hints at Further Weakness Ahead
  • S&P 500 Clears the Way for a Push Above the 1700 Figure
  • Gold Prices Challenge Two-Month Rising Trend Threshold

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Can’t access to the Dow Jones FXCM US Dollar Index? Try the USD basket on Mirror Trader. **

US DOLLAR TECHNICAL ANALYSIS – A break below a counter trend line support underpinning the upswing over the past month suggests the downtrend initiated at the July swing high as resumed. Sellers now aim to challenge the 50% Fibonacci expansion at 10631, with a break below that targeting the 61.8% level at 10588. Near-term resistance is at 10673, the 38.2% Fib.

Forex_Dollar_Selling_Tipped_to_Continue_SPX_500_Aiming_Above_1700_body_Picture_5.png, Dollar Selling Tipped to Continue, SPX 500 Aiming Above 1700

Daily Chart - Created Using FXCM Marketscope 2.0

** The Dow Jones FXCM US Dollar Index and the Mirror Trader USD basket are not the same product.

S&P 500 TECHNICAL ANALYSIS – Prices vaulted higher from support in a region bracketed by a pair of trend lines set from the November 2012. The bulls have now cleared the 38.2% Fibonacci expansion at 1684.10, exposing the 50% level at 1701.90. A further break above this barrier aims for the August 2 high at 1709.60 and the 61.8 Fib 1719.60. The 1684.10 level has been recast as support.

Forex_Dollar_Selling_Tipped_to_Continue_SPX_500_Aiming_Above_1700_body_Picture_6.png, Dollar Selling Tipped to Continue, SPX 500 Aiming Above 1700

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS Prices pulled back to support marked by the bottom of a rising channel set from the late-June swing bottom and a horizontal pivot barrier at 1347.52. A break below that broadly aims for the 1300/oz figure. Near-term resistance is at 1415.33, the 38.2% Fibonacci retracement.

Forex_Dollar_Selling_Tipped_to_Continue_SPX_500_Aiming_Above_1700_body_Picture_7.png, Dollar Selling Tipped to Continue, SPX 500 Aiming Above 1700

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL TECHNICAL ANALYSIS Prices declined as expected after putting in a bearish Dark Cloud Cover candlestick pattern at resistance in the 109.66-110.32 area, marked by the February 2012 closing high and the 50% Fibonacci expansion. Near-term support is at 106.04, the 23.6% Fib, followed by a rising trend line at 104.20.Initial resistance is at 108.40, the 38.2% level.

Forex_Dollar_Selling_Tipped_to_Continue_SPX_500_Aiming_Above_1700_body_Picture_8.png, Dollar Selling Tipped to Continue, SPX 500 Aiming Above 1700

Daily Chart - Created Using FXCM Marketscope 2.0

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

Contact and follow Ilya on Twitter: @IlyaSpivak

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12 September 2013 03:20 GMT