S&P 500 at Trend-Defining Resistance, US Dollar Chart Hints at Upswing
THE TAKEAWAY – The S&P 500 is testing a trend-defining resistance level, with a pullback hinted as US Dollar positioning suggests an upswing is ahead for the safe-haven currency.
S&P 500 – Prices took out resistance at 1230.90, the top of the range that confined them since mid-August. The bulls are now testing 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 has been recast as near-term support. A break higher exposes the 76.4% Fibonacci retracement at 1306.24.
CRUDE OIL – Prices invalidated the Bearish Engulfing candlestick pattern identified last week with a break above resistance at 90.62, the 38.2% Fibonacci retracement level. The bulls now aim to challenge the 50% level at $95.24. The 38.2% Fib has been recast as near-term support.
GOLD – Unchanged from yesterday: “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 put in a Hammer candlestick above support at 9593, the 50% Fibonacci extension, hinting a near-term bounce is ahead. Initial resistance lines up at 9645, the 38.2% Fib level. Alternatively, renewed selling targets the 61.8% boundary at 9542.
4hour Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
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