S&P 500 Recoils from Resistance as US Dollar Chart Hints Upswing Ahead
THE TAKEAWAY – The S&P 500 recoiled lower from a trend-defining resistance level, reinforcing emerging hints of a forthcoming upswing in the safe-haven US Dollar.
S&P 500 – Prices put in a Bearish Engulfing candlestick pattern below support-turned-resistance at 1257.30, the former neckline of a major Head and Shoulders top chart formation carved out between January and August. Near-term support lines up at 1228.10, the 50% Fibonacci retracement level, with a break below that exposing the 38.2% barrier at 1193.17.
CRUDE OIL – Prices put in a Shooting Star candlestick below resistance at 94.87, the 50% Fibonacci retracement of the drop from May’s swing high, pointing to a loss of bullish momentum and hinting a move lower is ahead. Initial support lines up at 90.17, the 38.2% Fib, with a break below that targeting the 23.6% and 38.2% extension levels at 85.33 and 79.62.
GOLD – Prices followed up a bullish Piercing Line candlestick pattern identified earlier with a break above resistance at 1680.78, the 38.2% Fibonacci retracement, exposing the 50% barrier at 1726.60. The 38.2% level has been recast as near-term support.
US DOLLAR – Prices put in an Inverted 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.
8hour Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
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