US Dollar Finds Support, Hints at Recovery as S&P 500 Rally Stalls
THE TAKEAWAY – The US Dollar found support and appears poised to rebound as the advance in the S&P 500 finds resistance and hints a move lower is ahead.
S&P 500 – Prices put in a Shooting Star candlestick below resistance at a rising trend line set from the October 27 high, hinting a reversal lower may be ahead. Resistance is reinforced by the 14.6% Fibonacci extension at 1251.33. Initial support lines up at 1225.71, the 23.6% Fib. Alternatively, a break higher exposes the October high at 1292.90.
CRUDE OIL – Prices are retesting support-turned-resistance at the underside of a rising channel set from October’s swing bottom. Overall positioning remains bearish absent a daily close above 103.35, the high of a Bearish Engulfing pattern completed on November 17. Key near-term support remains at 94.56.
GOLD – Prices are stalling below resistance at 1746.08, the 14.6% Fibonacci extension, with a Shooting Star candlestick hinting at a possible reversal lower ahead. Near-term support lines up at 1711.13, the 23.6% level, a boundary reinforced by a rising trend line underpinning price action since late September. Alternatively, a break higher exposes the November 8 high at 1802.77.
US DOLLAR – Prices bounced higher after putting in an Inverted Hammer candlestick above support in the 9823-9833 region, marked by the former neckline of a Head and Shoulders bottom completed in mid-November and the 38.2% Fibonacci retracement level respectively. Initial resistance stands at 9925, the 23.6% Fib, with a break above that exposing the 10000 figure. Alternatively, a reversal downward through immediate support leaves the door open to 9759.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
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