THE TAKEAWAY – The S&P 500 bounced aggressively higher but the advance appears corrective in the scope of a larger top in the works, with renewed selling expected ahead.
S&P 500 – Prices bounced from 23.6% Fibonacci retracement support at 1302.90, with the bulls retesting the previously broken rising trend line set from late December as resistance. A break above the January 26 high at 1334.40 is needed to overturn near-term bearish cues.
8hr Chart - Created Using FXCM Marketscope 2.0
CRUDE OIL – After a month of standstill, prices appear to have finally made a directional break with a close below support at 97.70, with sellers now aiming to challenge the top of a falling channel set from mid-November now recast as support (95.65). The 97.70 level is now acting as near-term resistance.
Daily Chart - Created Using FXCM Marketscope 2.0
GOLD – Prices are testing above resistance at 1746.10, with a confirmed break on a daily close above the level exposing 1802.80. However, negative RSI divergence warns that bullish momentum is fading and hints a reversal is ahead. Near-term term support lines up at 1716.17, a previously broken rising channel top.
Daily Chart - Created Using FXCM Marketscope 2.0
US DOLLAR – Prices have dropped to support at 9684, the 61.8% Fibonacci retracement. This barrier is reinforced by major pivot support at 9679, a barrier that has acted as significant support and resistance since August. Signs of positive RSI divergence on intraday charts (not shown) hint a bounce may be ahead, but confirmation is absent for now. The 50% Fib at 9759 marks initial resistance.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
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