THE TAKEAWAY: The US Dollar set a new yearly high overnight but S&P 500 positioning hints a bounce may be ahead, which may force a short-term correction in the greenback.
S&P 500 – Prices are testing support at 1331.50, the 123.6% Fibonacci expansion. A break below this boundary initially targets the 138.2% Fib at 1322.00. An Inverted Hammer candlestick points to indecision and hints at the possibility of a bounce, although a significant bullish close on the current bar is needed as confirmation of a forthcoming bounce. Near-term resistance is marked by the 100% expansion at 1347.80.
Daily Chart - Created Using FXCM Marketscope 2.0
CRUDE OIL – Prices are testing support at 92.51, the December 16 low, with a break below that on a daily closing basis exposing the next layer of support at 90.49. Near-term resistance is at 95.41, the February 2 session low.
Daily Chart - Created Using FXCM Marketscope 2.0
GOLD – Prices surpassed the measured target of a Triangle chart pattern carved out since late March at 1548.21 to probe below support at 1543.98, the 76.4% Fibonacci expansion. A break below this boundary sees supports at 1532.45 and 1522.50, the September 26 and December 29 spike lows respectively, followed by the 100% expansion at 1502.15. Initial resistance lines up at 1569.99, the 61.8% Fib.
Daily Chart - Created Using FXCM Marketscope 2.0
US DOLLAR – Prices are testing resistance at 10097, the March 15 swing high and 2012 year-to-date top, with a break above that on a daily closing basis exposing the 76.4% Fibonacci expansion at 10140. Near-term support is at 10079, the 61.8% expansion, followed by the April 5 high at 10047.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
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