US Dollar Consolidates, Technical Outlook Favors Gains Ahead
THE TAKEAWAY – US Dollar technical positioning hints the safe-haven currency is likely to advance following a period of consolidation as the S&P 500 recoils from range resistance.
S&P 500 – Unchanged from yesterday: “Prices continue to stall above support at 1197.29, the 23.6% Fibonacci extension level, with a Bearish Engulfing candlestick pattern identified on Monday still suggesting that the path of least resistance favors the downside. A break below initial support exposes the 38.2% level at 1173.71. Near term resistance is in the 1230.90 – 1257.30 region.”
CRUDE OIL – Unchanged from yesterday: “Prices put in a Bearish Engulfing candlestick pattern below resistance at $90.10, arguing for a downward reversal from here. Initial support stands at $84.61, the 23.6% Fibonacci extension level. A break below that exposes the 38.2% Fib at $80.97.”
GOLD – Prices broke below support at 1638.11, the intersection of the 14.6% Fibonacci extension and a rising channel carved out since late September, with the bears now challenging the 23.6% Fib at 1603.16. The 14.6% has now been recast as near-term resistance.
US DOLLAR – Prices continue to consolidate below resistance at 9800, the 23.6% Fibonacci retracement level. The Bullish Engulfing put in above support-turned-resistance at a falling trend lie set from the early-October swing high remains valid and continues to suggest the path of least resistance favors the upside. Near-term support is found at 9736. A break above 9800 exposes the 38.2% Fib at 9864.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
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