THE TAKEAWAY – US Dollar bulls are poised to challenge the 2011 closing high as the S&P 500 signals a top is forming, promising safe-haven demand for the greenback.
S&P 500 – Prices continue to hint a double top is taking shape below 1292.90, the October 27 high, with a bearish Hanging Man candlestick followed by a pair of Dojis to reinforce the likelihood that bullish momentum is fading. Initial support stands at 1265.30, with a break below that targeting a rising trend line now at 1244.30.
Daily Chart - Created Using FXCM Marketscope 2.0
CRUDE OIL – Prices are probing through support at 101.28, with a break below that clearing the way for a challenge of the 100.00 figure and 97.89. Near-term resistance remains at 103.35, the November 17 high. A return to bullish momentum that takes out this barrier on a daily closing basis initially exposes 106.05.
Daily Chart - Created Using FXCM Marketscope 2.0
GOLD – Prices put in a bearish Hanging Man candlestick below resistance at 1629.57, the 38.2% Fibonacci retracement level, hinting a move lower is ahead. Initial support lines up at 1576.35, a long-term rising trend line based from October 2008. Alternatively, a reversal higher through the 38.2% level exposes the 50% Fib at 1662.65
Daily Chart - Created Using FXCM Marketscope 2.0
US DOLLAR – Prices took out horizontal resistance at 9993, clearing the way for another challenge of the 2011 closing high at 10081. A break above this barrier clears the way for a challenge of 10134, with the longer-term bullish objective implied by a Head & Shoulders chart pattern carved out between October and November at 10237. The 9993 level has been recast as near-term support.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
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