US Dollar Pullback Threatened as Prices Approach Key Resistance
THE TAKEAWAY – The US Dollar is showing signs of ebbing upward momentum as prices approach a major hurdle at the confluence of two important technical resistance levels.
S&P 500 – Prices are testing below 50% Fibonacci extension support at 1091.65, with a break below the level on a daily closing basis exposing the next layer of support at the 61.8% level (1058.79). For the time being, the 38.2% Fib at 1124.51 stands as near-term resistance.
CRUDE OIL – Sellers continue to push prices lower, with the WTI contract now approaching the 61.8% Fibonacci extension level at $75.09. A break below this boundary exposes the 76.4% Fib at $71.45. Near-term resistance lines up at $78.03, the 50% level.
GOLD – Prices found support just below the $1600/oz figure at the 76.4% Fibonacci retracement level ($1582.52) and bounced higher, edging above the 61.8% level at $1647.16. The bulls now aim for the 50% Fib at 1699.40, with the 61.8% retracement recast as support. Importantly, the gains are seen as corrective within the context of a larger down move.
US DOLLAR – Prices are approaching major resistance at the intersection of the 50% Fibonacci extension and the top of a rising channel set from late August (10143), with early signs of negative RSI divergence hinting pullback is ahead. Initial support stands at 10067, the 38.2% Fib.
Daily Chart - Created Using FXCM Marketscope 2.0
Written by Ilya Spivak, Currency Strategist for Dailyfx.com
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