THE TAKEAWAY: S&P 500 and US Dollar technical positioning hints at oncoming risk aversion, hinting at a potential reversal of short-term trends in place since mid-December.
S&P 500 – Overall positioning is little changed from what we identified yesterday, but prices have put in a bearish Hanging Man candlestick below resistance in the 1351.40-1358.60 area to hint that a reversal may be ahead. Initial support lines up at the bottom of a minor rising channel set from late December, now at 1324.40. Alternatively, a break higher exposes the 2011 swing high at 1376.10.
Daily Chart - Created Using FXCM Marketscope 2.0
CRUDE OIL – Prices remain wedged between support at 97.70 and resistance at the top of a falling channel set from early January, now at 100.38. The upside barrier is reinforced by a horizontal pivot at 101.28, with a break higher exposing 103.35. Alternatively, renewed selling that takes prices through 97.70 on a daily closing basis clears the way for a test of the channel bottom, now at 95.29.
Daily Chart - Created Using FXCM Marketscope 2.0
GOLD – Prices pulled back to test support at the top of a formerly broken rising channel set from early January (now at 1726.13), a barrier reinforced by the 38.2% Fibonacci retracement at 1719.45. A break lower initially exposes 1702.90. Overall positioning has argued in favor of the bearish scenario since prices formed a Bearish Engulfing candlestick pattern on February 3, with a daily close above 1763.07 needed to change the tone to a neutral setting.
Daily Chart - Created Using FXCM Marketscope 2.0
US DOLLAR – Prices put in a Harami candlestick pattern above support at 9679, a barrier reinforced by the 61.8% Fibonacci retracement at 9684, hinting a bounce may be ahead. Near-term resistance lines up at 9759, the 50% level. Alternatively, a turn lower exposes 9592, the 76.4% Fib.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
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