THE TAKEAWAY: The US Dollar has taken a step backward while the S&P 500 appears to have confirmed a near-term top, paving the way for weakness in the days ahead.
S&P 500 – Prices took out support at 1392.10, the neckline of a Head and Shoulders (H&S) top chart formation. Sellers face initial support at 1377.10, with 1392.10 recast as near-term resistance. The H&S setup implies a measured downside target at 1359.30.
Daily Chart - Created Using FXCM Marketscope 2.0
CRUDE OIL – Prices are reversing lower from resistance in the 102.97-103.21 marked by January top as well as the 50% Fibonacci retracement to once again challenge the 61.8% level at 101.19. A break below this boundary exposes the rising trend line support set from mid-December, now at 99.97.
Daily Chart - Created Using FXCM Marketscope 2.0
GOLD – Prices broke back above the 38.2%Fibonacci expansion level at 1634.76 to retest support-turned-resistance at 1644.45. A break above this boundary exposes the 23.6% Fib at 1658.57. The 38.2% expansion has been recast as near-term support, with a break back below it clearing the way for another test of the 50% level at 1615.46.
Daily Chart - Created Using FXCM Marketscope 2.0
US DOLLAR – Prices pulled back to retest resistance-turned-support at 9996, the 50% Fibonacci expansion level. A break below this boundary exposes the 38.2% Fib at 9919. Near-term resistance remains in the 10072-10081 area, marked by the 61.8% expansion and the October 4 closing high.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
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