US Dollar Retreats as S&P 500 Chart Setup Calls for Upswing Ahead
THE TAKEAWAY – The safe-haven US Dollar has begun to pull back while the S&P 500 recovered, with technical positioning calling for a correction before further risk aversion.
S&P 500 – Prices put in a bullish Piercing Line candlestick pattern above support at 1092.02, the 50% Fibonacci extension level, hinting an upswing is ahead. Initial resistance stands at 1124.81, the 38.2% Fib. A break above this boundary exposes the 23.6% level at 1165.39.
CRUDE OIL – Similarly to the S&P 500, prices put in a bullish Piercing Line candlestick pattern above support at 75.09, the 61.8% Fibonacci extension level. Positive RSI divergence reinforces the case for an upside scenario. Initial resistance stands at 78.03, the 50% Fib, with a breakout higher targeting the 38.2% level at 80.97.
GOLD – Prices are testing the lower boundary of their recent range at 1589.14, the 14.6% Fibonacci retracement level. A break below this level exposes the September 26 low at 1532.45. Near-term significant resistance stands at 1680.78, the 38.2% Fib.
US DOLLAR – Prices put in a bearish Dark Cloud cover candlestick below resistance at 10139, the 50% Fibonacci extension level reinforced by the top of a rising channel set from late August. Negative RSI divergence bolsters the case for near-term weakness. Initial support stands at 9979, the 23.6% Fib, with a break below that targeting 9831.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
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