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US Dollar Chart Setup Hints Two-Week Pullback May Be Exhausted

US Dollar Chart Setup Hints Two-Week Pullback May Be Exhausted

2012-03-28 02:41:00
Ilya Spivak, Head Strategist, APAC
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THE TAKEAWAY: US Dollar technical positioning hints the pullback witnessed over the past two weeks may have run its course with a bullish reversal starting to take shape.

S&P 500 – Prices put in a bearish Harami candlestick pattern below resistance at the top of a Rising Wedge chart formation being carved out since November, with negative RSI divergence reinforcing the case for a downside scenario. Initial support lines up at 1408.80, the 38.2% Fibonacci expansion level. Importantly, we’ve seen plenty of false starts to the downside recently so caution is warranted pending firm confirmation on a break of the Wedge formation’s bottom on a daily closing basis. Near-term esistance is now at 1424.20.

US_Dollar_Chart_Setup_Hints_Two-Week_Pullback_May_Be_Exhausted_body_Picture_5.png, US Dollar Chart Setup Hints Two-Week Pullback May Be Exhausted

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL Prices appear to be carving out a descending Triangle chart pattern. The setup generally argues in favor of a turn lower but confirmation is needed on a clear break of support at 104.75, the 38.2% Fibonacci retracement level. Near-term falling trend line resistance lines up at 107.95.

US_Dollar_Chart_Setup_Hints_Two-Week_Pullback_May_Be_Exhausted_body_Picture_6.png, US Dollar Chart Setup Hints Two-Week Pullback May Be Exhausted

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD Prices pulled back from resistance at 1691.06, the 23.6% Fibonacci expansion, with sellers facing initial support at 1666.37. A break below this barrier exposes 1641.62. Alternatively, a reversal higher through near-term resistance targets the 38.2% expansion at 1730.16.

US_Dollar_Chart_Setup_Hints_Two-Week_Pullback_May_Be_Exhausted_body_Picture_7.png, US Dollar Chart Setup Hints Two-Week Pullback May Be Exhausted

Daily Chart - Created Using FXCM Marketscope 2.0

US DOLLAR Prices put in a Bullish Engulfing candlestick above support at 9885, the confluence of the 38.2% Fibonacci retracement and two trend lines, a falling one set from mid-December that previously acted as resistance and a more recent rising one established from the February 8 low. The setup hints the pullback playing out over the past two weeks may have run its course. Initial resistance lines up at 9997, the 23.6% Fib.

US_Dollar_Chart_Setup_Hints_Two-Week_Pullback_May_Be_Exhausted_body_Picture_8.png, US Dollar Chart Setup Hints Two-Week Pullback May Be Exhausted

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 Ilya 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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