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S&P 500 Nears 2011 High as Dollar Chart Setup Sees More Weakness

S&P 500 Nears 2011 High as Dollar Chart Setup Sees More Weakness

Ilya Spivak, Head Strategist, APAC

THE TAKEAWAY: The S&P 500 is on its way to test the 2011 yearly high as US Dollar technical positioning warns the safe-haven currency may see further near-term losses.

S&P 500 – Prices overcame resistance at 1358.60, the July 2011 high, and now aim for the May 2011 top at 1376.10. Negative RSI divergence hints at ebbing bullish momentum and warns a reversal may be imminent. The 1358.60 level has been recast as near-term support.

SP_500_Nears_2011_High_as_Dollar_Chart_Setup_Sees_More_Weakness_body_Picture_5.png, S&P 500 Nears 2011 High as Dollar Chart Setup Sees More Weakness

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL Prices broke through resistance at 103.66, the January 4 high, exposing the next upside barrier at the 123.6% Fibonacci extension (105.61). Continued upward momentum above here targets 106.81, the 138.2% Fib. The 103.66 level has been recast as near-term support.

SP_500_Nears_2011_High_as_Dollar_Chart_Setup_Sees_More_Weakness_body_Picture_6.png, S&P 500 Nears 2011 High as Dollar Chart Setup Sees More Weakness

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD Prices are testing through the top of a Descending Triangle set from early February, with a break higher invalidating the formation’s bearish implications and exposing initial resistance levels at 1746.10 and 1763.00. Near-term support lines up at 1714.05. A break below that targets 1677.05.

SP_500_Nears_2011_High_as_Dollar_Chart_Setup_Sees_More_Weakness_body_Picture_7.png, S&P 500 Nears 2011 High as Dollar Chart Setup Sees More Weakness

Daily Chart - Created Using FXCM Marketscope 2.0

US DOLLAR Prices are capped by the 50% Fibonacci retracement level at 9863, with negative RSI divergence warning of weakness ahead. Initial support lines up at 9788, the 23.6% Fib expansion, with a break below that targeting the 38.2% level at 9732.

SP_500_Nears_2011_High_as_Dollar_Chart_Setup_Sees_More_Weakness_body_Picture_8.png, S&P 500 Nears 2011 High as Dollar Chart Setup Sees More Weakness

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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