US Dollar Chart Setup Points to Gains as S&P 500 Hits Critical Resistance
THE TAKEAWAY – Technical positioning hints the US Dollar may be readying for a move higher on renewed safe-haven demand as the S&P 500 hits critical range top resistance.
S&P 500 – Prices are testing resistance at 1230.90, the top of the range that has confined trading since early August. A break higher targets support-turned-resistance at 1257.30, the former neckline of a major Head and Shoulders top. Initial support stands at 1208.90.
CRUDE OIL – Prices broke through resistance at the top of a falling channel set from early May. The bulls are now poised to challenge the 38.2% Fibonacci retracement level at $90.17. Near-term support lines up at $84.35, the 23.6% Fib.
GOLD – Broadly speaking, the standstill in place over the past two weeks continues. Prices are locked in a choppy range between the 14.6% and 38.2% Fibonacci retracements at 1589.14 and 1680.78 respectively. A break below immediate support exposes the September 26 low at 1532.45. Alternatively, a push higher through the range top exposes the 50% Fib at 1726.60.
US DOLLAR – Prices put in a bullish Piercing Line candlestick pattern, hinting an upswing is ahead. Positive RSI divergence reinforces the case for an upside scenario. Initial trend line resistance stands at 9774, with a break higher overturning the short-term down trend in place since the October 4 swing high and exposing the 23.6% Fibonacci retracement at 9800.
4hr Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
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