S&P 500 Indecision Keeps Door Open to US Dollar Advance
THE TAKEAWAY – S&P 500 indecision below a key resistance level warns of a bearish reversal and opens the door for an advance of the safe-haven US Dollar.
S&P 500 – Prices continue to stall below rising trend support-turned-resistance in place since mid-October, with back-to-back Shooting Star and Doji candlesticks over the past 4 days warning of fading bullish conviction and hinting a reversal lower is ahead. The series of lower 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. Alternatively, a break higher exposes the 1300 figure.
CRUDE OIL – Unchanged from yesterday: “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 the 100/barrel figure – a key psychological barrier – with a break below that exposing 94.56.
GOLD – Prices continue to stall 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 1689.65). A break below the latter hurdle exposes the 38.2% Fib at 1654.44.
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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