THE TAKEAWAY: The US Dollar has taken out major trend-defining resistance while the S&P is nearing confirmation of a major bearish reversal chart formation.
S&P 500 – Prices broke lower as expected after completing a bearish Evening Doji Star candlestick pattern, taking out initial support at 1363.90 to expose the 1334.40-41.90 area. A daily close below this boundary confirms a Rising Wedge bearish chart formation, opening the door for a larger reversal. The 1363.90 level has been recast as near-term resistance.
Daily Chart - Created Using FXCM Marketscope 2.0
CRUDE OIL – Prices broke lower through resistance-turned-support at 85.50 after putting in a Shooting Star candlestick below the 90.00 figure. Sellers now aim to challenge the 82.10-81.19 area marked by the 23.6% Fibonacci expansion and a former range bottom, with a break below that exposing the 38.2% level at 77.83. The 85.50 level has been recast as resistance once again.
Daily Chart - Created Using FXCM Marketscope 2.0
GOLD – Prices broke lower as expected after showing a bearish Evening Star candlestick pattern below falling trend line resistance set from late March. A breach of the 1600/oz figure, a psychological barrier reinforced by the 23.6% Fibonacci expansion, now sees bears challenging the 38.2% level at 1575.81. A break below that targets the 50% Fib at 1555.61. The 1600 level has been recast as near-term resistance.
Daily Chart - Created Using FXCM Marketscope 2.0
US DOLLAR – Prices took out falling trend line resistance set from late May, exposing the 38.2% Fibonacci expansion at 10219 as the next upside objective. The trend line has been recast as near-term support, and now stands at 10141.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
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