S&P 500 Chart Setup Favors Losses, US Dollar Testing Key Resistance
THE TAKEAWAY – S&P 500 technical positioning continues to favor losses after a period of consolidation while the US Dollar is testing above a major multi-month range resistance level.
S&P 500 – Prices continue to consolidate in a Flag chart pattern, broadly pointing to downward continuation. The resumption of overtly bearish momentum requires a break below 1137.15, the 38.2% Fibonacci extension level which currently closely coincides with the Flag formation bottom. Near-term resistance stands at 1172.89.
CRUDE OIL – Positioning closely mirrors that of the S&P 500, with prices testing the top of a Flag chart formation reinforced by the upper boundary of a rising channel set from early May. Here too, the setup is hinting at bearish continuation pattern, with initial support lining up at the 23.6% Fibonacci extension level ($83.12).
GOLD –A pair of Bearish Engulfing candlesticks may be marking a double top below the $1900 figure, with confirmation seen on a break of an upward-sloping neckline established since early August. Negative RSI divergence bolsters the case for a downside scenario. A breakdown at current levels would aim toward a measured target close to $1633.04, although an actual close below trend line support is needed before the implied objective can be calculated precisely.
US DOLLAR – Prices are testing range resistance at 9764, a triple top in place since mid-May. While prices are testing above the boundary presently, a pair of Inverted Hammer candlesticks hints that a pullback is ahead, with only a daily close above 9764 sufficient to neutralize that warning signal. If a near-term reversal lower is to materialize, initial support lines up at 9699 and 9646. Alternatively, a break higher exposes 9887.
Created Using FXCM Marketscope 2.0
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