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S&P 500 Overturns Bullish Chart Setup but US Dollar Continues to Stall

S&P 500 Overturns Bullish Chart Setup but US Dollar Continues to Stall

Ilya Spivak, Head Strategist, APAC

THE TAKEAWAY: The S&P 500 has neutralized a major bullish technical setup but the safe-haven US Dollar has failed to show follow-through, stalling at resistance.

S&P 500 – Prices invalidated a bullish inverse Head and Shoulders pattern with a break below falling trend line support set from early May. Sellers now aim to challenge the 38.2% Fibonacci expansion at 1305.90. The trend line, now at 1323.60, has been recast as near-term resistance.

SP_500_Overturns_Bullish_Chart_Setup_but_US_Dollar_Continues_to_Stall_body_Picture_5.png, S&P 500 Overturns Bullish Chart Setup but US Dollar Continues to Stall

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL Prices completed a bullish Piercing Line candlestick pattern above support at 77.34, the 38.2%Fibonacci expansion, hinting a bounce may be ahead. Positive RSI divergence reinforces the case for a bounce. Initial resistance lines up at 81.07, the 23.6% Fib, with a break higher exposing the June 7 high at the 87.00 figure.

SP_500_Overturns_Bullish_Chart_Setup_but_US_Dollar_Continues_to_Stall_body_Picture_6.png, S&P 500 Overturns Bullish Chart Setup but US Dollar Continues to Stall

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD Prices found support at a rising trend line set from the mid-May swing low, a barrier reinforced by the 50% Fibonacci expansion at 1568.46. A bounce here sees initial resistance at 1585.42, the 38.2% expansion, with a break above that exposing the 1600/oz figure. Alternatively, a turn lower through support exposes the 61.8% level at 1551.50.

SP_500_Overturns_Bullish_Chart_Setup_but_US_Dollar_Continues_to_Stall_body_Picture_7.png, S&P 500 Overturns Bullish Chart Setup but US Dollar Continues to Stall

Daily Chart - Created Using FXCM Marketscope 2.0

US DOLLAR Prices are testing resistance at 10172, the 14.6% Fibonacci expansion. A turn lower sees initial support at 10081, the October 3 2011 closing high. Alternatively, a break higher exposes the 23.6% expansion at 10261.

SP_500_Overturns_Bullish_Chart_Setup_but_US_Dollar_Continues_to_Stall_body_Picture_8.png, S&P 500 Overturns Bullish Chart Setup but US Dollar Continues to Stall

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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