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S&P 500 Moves Closer to Confirming Top, Hinting at US Dollar Strength

S&P 500 Moves Closer to Confirming Top, Hinting at US Dollar Strength

2012-01-12 01:22:00
Ilya Spivak, Head Strategist, APAC
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THE TAKEAWAYS&P 500 technical positioning hints a double top is forming below the 1300 figure, promising forthcoming gains for the safe-haven US Dollar.

S&P 500 – Prices put in a bearish Hanging Man candlestick below resistance at 1292.90, the October 27 high, hinting a move lower is ahead and bolstering the case for a forthcoming double top formation. Near-term support stands at 1265.30, while a daily close above 1292.90 initially exposes 1305.40.

SP_500_Moves_Closer_to_Confirming_Top_Hinting_at_US_Dollar_Strength_body_Picture_5.png, S&P 500 Moves Closer to Confirming Top, Hinting at US Dollar Strength

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL Prices took out support at 101.28, hinting a double to is in place below 103.35, the November 17 high, and exposing the next downside barrier at 97.89. The narrow breach is somewhat suspect however and may prove to be head-fake so additional confirmation is needed before the bearish argument can be made convincingly. The 101.28 level has been recast as near-term resistance.

SP_500_Moves_Closer_to_Confirming_Top_Hinting_at_US_Dollar_Strength_body_Picture_6.png, S&P 500 Moves Closer to Confirming Top, Hinting at US Dollar Strength

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD Prices continued higher after taking out resistance at 1629.57, the 38.2% Fibonacci retracement, with the bulls now aiming to challenge the 50% level at 1662.65. A daily close above this boundary exposes the 61.8% mark at 1698.73. The 38.2% mark has been recast as near-term support.

SP_500_Moves_Closer_to_Confirming_Top_Hinting_at_US_Dollar_Strength_body_Picture_7.png, S&P 500 Moves Closer to Confirming Top, Hinting at US Dollar Strength

Daily Chart - Created Using FXCM Marketscope 2.0

US DOLLAR The greenback rebounded from support at the midline of a falling channel in place since mid-December to challenge the formation’s top, now at 10015. A break above this juncture exposes the 2011 closing high at 10081. Channel midline support is now at 9925.

SP_500_Moves_Closer_to_Confirming_Top_Hinting_at_US_Dollar_Strength_body_Picture_8.png, S&P 500 Moves Closer to Confirming Top, Hinting at US Dollar Strength

Daily Chart - Created Using FXCM Marketscope 2.0

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

To contact Ilya, e-mail ispivak@dailyfx.com. Follow me on Twitter at @IlyaSpivak

To be added to Ilya's e-mail distribution list, send a note with subject line "Distribution List" to ispivak@dailyfx.com

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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