US Dollar Probing Below Critical Support as S&P 500 Recovery Continues
THE TAKEAWAY – The US Dollar is testing below a critical support defining the currency’s medium-term advance as the S&P 500 continues to correct higher, sapping safe haven demand.
S&P 500 – Prices are testing above 61.8% Fibonacci retracement resistance at 1177.55, with a break higher exposing the 76.4% level at 1194.00. For the time being, the 50% level at 1164.25 stands at support but in the event of a break higher the 61.8% level will be recast as the near-term downside barrier.
CRUDE OIL – Prices are testing 23.6% Fibonacci extension resistance at $84.16, with a break higher exposing the top of a falling channel set from early May at $87.92. Near-term support stands at $80.97, the 38.2% Fib. Overall positioning is bearish barring a daily close above the channel top.
GOLD – Prices are stalling between familiar near-term support and resistance levels at $1624.09 and $1680.78, the 23.6% and 38.2% Fibonacci retracements respectively. A break lower exposes $1589.14, while a deeper upward correction targets $1726.60.
US DOLLAR – Prices are testing key support at 9831, the intersection of the 38.2% Fibonacci extension level and the bottom of a rising channel set from late August. The 50% Fib at 9878 has been recast as resistance. A break through support would deal a critical blow to the medium-term US dollar uptrend, initially exposing the 23.6% extension at 9770.
Daily Chart - Created Using FXCM Marketscope 2.0
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