US Dollar May Pull Back Before Broad-Based Rally Resumes
S&P 500 – Prices appear to have validated the bearish Flag setup we have been monitoring over recent weeks with a close below the formation’s bottom. The bears now stand to challenge support at 1113.10 and 1080.10. The Flag’s lower boundary, now at 1140.90, has been recast as near-term resistance.
CRUDE OIL – Prices sank through support at $84.61 – the 23.6% Fibonacci extension level as well as the bottom of a Flag bearish formation pattern analogous to the one noted for the S&P 500 – and went on to pierce the 38.2% boundary at $80.97. The door is now open for a decline to the 50% extension at $78.03. The 38.2% level has been recast as near-term resistance.
GOLD – Prices continue to inch toward validation of a double top below the $1900 figure, with the latest push lower taking out support at $1745.25. From here, sellers will move to challenge support at $1702.90, the August 25 low. The $1745.25 level has been recast as resistance, with a corrective swing above that exposing retest of the $1800 figure.
US DOLLAR – Prices are testing 76.4% Fibonacci extension resistance at 9,985, with a break higher exposing the measured target implied by the Aug 30 – Sep 14 rally and subsequent Sep 15 correction at 10,078. However, overbought RSI studies hint a pullback may be in order before the advance resumes. Initial support lines up at 9,923 – the 61.8% extension level – with a break below eyeing the bottom of a rising channel carved out since the swing low in late August.
Daily Chart - Created Using FXCM Marketscope 2.0
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