US Dollar Breaks Four-Month Range Top, Hinting Rally to Accelerate
THE TAKEAWAY – The US Dollar broke above the upper boundary of a range that confined price action for the past four months, opening the door for acceleration to the upside.
S&P 500 – Prices are probing below near-term resistance-turned-support at $1204.40, with a break below exposing the next layer at $1176.40. Broadly speaking, consolidation within a Flag chart formation points to bearish continuation, with the resumption of the larger down move confirmed on a break below the Flag bottom (now at $1136.32).
CRUDE OIL – Prices moved lower to test support at the bottom of a Flag chart formation having put in a Bearish Engulfing candlestick pattern at resistance marked by the intersection of the Flag top and the upper boundary of a falling channel set from early May. As with the S&P 500, the Flag setup points to bearish continuation, with the resumption of the down move confirmed on a break below the formation’s bottom at $84.54 (a level reinforced by the 23.6% Fibonacci extension at $84.61).
GOLD – Prices continue to move lower after carving out a double top below the $1900/oz figure with a pair of Bearish Engulfing candlestick patterns. Near-term support stands at $1749.61, the August 24 session low, while resistance lines up at a falling trend line capping the upside since September 6, now at $1805.85. Longer term, the double top implies a measured target at $1627.25.
US DOLLAR – Prices broke above range resistance at 9756, a boundary that capped the upside since late May. The bulls now aim to challenge the next upside barrier at 9887, the April 1 session high. The 9756 level has been recast as support.
Created Using FXCM Marketscope 2.0
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