THE TAKEAWAYThe S&P 500 reversed sharply lower as expected, shaking the US Dollar out of complacency and pushing prices higher amid renewed safe-haven demand.

S&P 500 – As we suspected yesterday, prices followed a Doji candlestick below resistance at 1273.40 with a reversal lower. From here, the bears aim to challenge the 23.6% Fibonacci extension at 1238.50, with a break below that exposing the 38.2% level at 1217.80. Near-term resistance remains at 1273.40.

SP_500_Recoils_From_Resistance_Breathing_Life_into_US_Dollar_body_Picture_5.png, S&P 500 Recoils From Resistance, Breathing Life into US Dollar

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL Prices put in a Bearish Engulfing candlestick pattern below resistance at 101.80, pointing to continued losses ahead. Initial support lines up at 99.19, a former resistance at the top of a falling channel set from mid-November. A break below this boundary exposes 97.89.

SP_500_Recoils_From_Resistance_Breathing_Life_into_US_Dollar_body_Picture_6.png, S&P 500 Recoils From Resistance, Breathing Life into US Dollar

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD Prices broke major long-term support at a rising trend line dating back to late October 2008, pointing to a major bearish reversal (although reading too much into current price action seems unwise given atypically low holiday-induced liquidity conditions across financial markets). From here the bears target the next layer of support at 1486.52. The trend line – now at 1568.46 – has been recast as near-term resistance.

SP_500_Recoils_From_Resistance_Breathing_Life_into_US_Dollar_body_Picture_7.png, S&P 500 Recoils From Resistance, Breathing Life into US Dollar

Daily Chart - Created Using FXCM Marketscope 2.0

US DOLLAR Prices took out resistance at 9982, the 14.6% Fibonacci retracement level, opening the door for another test of the year-to-date closing high at 10081. A break above this boundary exposes the October 4 session high at 10134. The 14.6% Fib has been recast as near-term support.

SP_500_Recoils_From_Resistance_Breathing_Life_into_US_Dollar_body_Picture_8.png, S&P 500 Recoils From Resistance, Breathing Life into US Dollar

Daily Chart - Created Using FXCM Marketscope 2.0

--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com

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