US Dollar Probing Higher as S&P 500 Signals Top May be in Place
THE TAKEAWAY – The US Dollar is probing above near-term technical resistance as the S&P 500 chart setup points to a top in place, boosting safe-haven demand for the greenback.
S&P 500 – Prices put in a Bearish Engulfing candlestick pattern below rising trend support-turned-resistance in place since mid-October, hinting a reversal lower is ahead. Initial support lines up at 1225.71, the 23.6% Fibonacci extension level, with a break lower exposing the 38.2% barrier at 1184.14. Trend line resistance is now at 1272.57.
CRUDE OIL – Prices are testing minor rising trend line support set from late October, with a break lower exposing 94.56. Near-term resistance is found in the 101.81-103.35 region, with only a daily close above the latter level negating the overall downside bias established by a Bearish Engulfing candlestick pattern completed on November 17.
GOLD – Prices are probing through support at 1699.51, the intersection of a rising trend line set from late September and the 38.2% Fibonacci retracement level. A break lower exposes the 50% level at 1667.61. Pending that, resistance stands at 1748.15.
US DOLLAR – Prices are testing above the 14.6% Fibonacci extension at 9927 having put in a Bullish Engulfing candlestick above resistance-turned-support at 9823, a former Head and Shoulders bottom neckline. A break higher exposes the 23.6% level at 9982. Longer term, the implied Head and Shoulders bottom target is at 10237.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
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