THE TAKEAWAY – US Dollar technical positioning suggests the currency may be preparing to stage a recovery while the S&P 500 backpedals from resistance.
S&P 500 – Prices are rising to test the upper boundary of a rising channel established from late December, now at 1331.60, but negative RSI divergence warns that bullish momentum may be fading. A reversal lower that breaks resistance at 1307.10 exposes the 1285.90.
8hr Chart - Created Using FXCM Marketscope 2.0
CRUDE OIL – Positioning is broadly unchanged from yesterday: Prices continue to consolidate above support at 97.70, with the first layer of resistance still at 101.28. A break lower exposes resistance-turned-support at the top of a falling channel set from mid-November, now at 96.37. Alternatively, a push higher initially targets the mid-November high at 103.35.
Daily Chart - Created Using FXCM Marketscope 2.0
GOLD – Prices put in a Bearish Engulfing candlestick pattern below support-turned-resistance at 1677.05, hinting a move lower is ahead. Initial support stands at the bottom of a rising channel set from early January now at 1657.98, with a break below that exposing 1638.84.
Daily Chart - Created Using FXCM Marketscope 2.0
US DOLLAR – Prices put in a bullish Inverted Hammer candlestick above support at 9823, the former neckline of an inverted Head & Shoulders pattern, hinting a move higher is ahead. Initial resistance stands at 9895, the midline and top of a falling channel in place since mid-December, with a break above that exposing the channel top at 9981.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
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