THE TAKEAWAY: The US Dollar has cleared key resistance defining the down trend since mid-March while the S&P 500 is starting to build to catch up to the downside.
S&P 500 – Prices negated a pair of Hammer candlesticks identified yesterday with a break through support at 1363.50, the 76.4% Fibonacci expansion. The bears now set their sights on the 1339.40-1347.40 area, marked by the 100% Fib expansion as well as the 38.2% retracement of the rally from the December 19 2011 swing low. A push below here exposes the 50% retracement at 1313.00. The 1363.50 level has been recast as near-term resitance.
Daily Chart - Created Using FXCM Marketscope 2.0
CRUDE OIL – Prices continue to grind through support in the 95.78-96.56 area marked by a horizontal barrier in play since early November 2011 as well as the 100% Fibonacci expansion. A break below this exposes 92.51. Near-term resistance lines up at 98.89, the 76.4% expansion.
Daily Chart - Created Using FXCM Marketscope 2.0
GOLD – Selling continues after completion of a Triangle chart formation carved out since late March – a setup indicative of bearish continuation – with prices narrowly taking out support at 1591.00 marked by the 50%Fibonacci expansion. The bears now aim to challenge the 61.8% level at 1569.73. The 50% Fib has been recast as near-term resistance, with a push above that targeting the 38.2% level at 1661.75. Longer term, the Triangle pattern implies a measured downside objective at 1548.21.
Daily Chart - Created Using FXCM Marketscope 2.0
US DOLLAR – The move higher marked by the formation of a Morning Star candlestick pattern identified last week continues. Prices broke above resistance at a falling trend line established from mid-March. The bulls see the next layer of resistance at 10047, the April 5 high. The trend line – now at 9963 – has been recast as near-term support.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
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