US Dollar May Face Deeper Losses Before Rebound as S&P 500 Gains
THE TAKEAWAY – The US Dollar may face another push lower before a reversal materializes while the S&P 500 edges higher having taken out resistance at a key range top.
S&P 500 – Prices took out resistance at 1230.90, the top of the range that confined them since mid-August. The bulls will now aim to challenge support-turned-resistance at the former neckline of a major Head and Shoulders top chart formation carved out between January and August at 1257.30. The 1230.90 level as been recast as near-term support.
CRUDE OIL – Prices bounced but failed to overturn the Bearish Engulfing candlestick pattern below resistance at $90.10 identified last week. The overall setup continues to hint the path of least resistance leads downward, with initial support marked by the 23.6% Fibonacci extension at $84.61.
GOLD – Prices continue to consolidate in the $1600-1700 range that has persisted since late September. A bullish Piercing Line candlestick pattern at support hints an upswing is ahead, exposing initial resistance at $1660.55 followed by another challenge of the $1700 figure.
US DOLLAR – Prices took out 38.2% Fibonacci extension support at 9645 to expose the 50% level at 9594. This boundary is reinforced by resistance-turned-support at a falling trend line established from the October 4 high. Early signs of positive RSI divergence hint sellers are losing momentum and a reversal may be in the works ahead. The 38.2% Fib has been recast as near-term resistance.
4hour Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
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