S&P 500 Chart Setup Hints at Weakness, Promising Boost to US Dollar
THE TAKEAWAY – S&P 500 technical positioning hints a reversal lower looms ahead, promising to reboot the rally in the safe-haven US Dollar.
S&P 500 – Prices put in a second Shooting Star candlestick below rising trend support-turned-resistance in place since mid-October, hinting a reversal lower may be ahead. The series of lower closing tops playing out since October 27 likewise remains unbroken, arguing in favor of a broadly bearish bias. Initial support lines up at 1239.10, the 23.6% Fibonacci retracement level.
CRUDE OIL – Prices put in a Dark Cloud Cover candlestick pattern below resistance at 103.35 following a retest of a rising channel bottom established from early October, hinting a move lower is ahead. Initial support lines up at 94.56.
GOLD – As we suspected yesterday, prices moved lower following the formation of a Shooting Star candlestick below resistance at 1746.08, the 14.6% Fibonacci extension. Near-term support remains at 1711.13, the 23.6% level, a boundary reinforced by a rising trend line underpinning price action since late September (now at 1689.26). A break below the latter hurdle exposes the 38.2% Fib at 1654.44. The 14.6% level continues to act as immediate resistance.
US DOLLAR – Unchanged from yesterday: “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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