US Dollar Pullback Has Room to Continue Before Rally Resumes
THE TAKEAWAY – Technical positioning hints the US Dollar has room to continue its downward correction but the larger trend still favors the return to a longer-term advance.
S&P 500 – Prices put in a Doji candlestick above 38.2% Fibonacci extension support at 1127.42 and proceeded to move higher, with the bulls now probing above the 23.6% level at 1167.03. A daily close above this juncture exposes resistance at 1227.40, with 1167.03 recast as support. For the time being however, the immediate downside barrier remains at 1127.42.
CRUDE OIL – Prices broke above 38.2% Fibonacci extension resistance at $80.97 yesterday, opening the door for a move to the 23.6% level at $84.61 from here. The 38.2% Fib has been recast as near-term support. Gains remain corrective whilst within the falling channel carved out from early May.
GOLD – A pronounced Hammer candlestick above support at $1624.09 – the 23.6% Fibonacci retracement level – preceded the beginnings of a corrective bounce. Buyers now see the 38.2% level at $1680.78 as near-term resistance. The 23.6% Fib continues to act as immediate support.
US DOLLAR – Prices followed a bearish Hanging Man candlestick below resistance at 9985, the 76.4% Fibonacci extension, with a break through the 61.8% extension level at 9923. The next major layer of support stands at 9831, the intersection of the 38.2% Fib and the bottom of a rising channel set from late August. The 61.8% mark has been recast as resistance.
Daily Chart - Created Using FXCM Marketscope 2.0
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