THE TAKEAWAY: S&P 500 technical positioning continues to favor an upside scenario while the US Dollar has meet resistance after staging a shallow recovery.
S&P 500 – Prices put in a Bullish Engulfing candlestick pattern above support at a rising trend line set from late July, hinting a move higher is ahead. Initial resistance lines up at 1466.10, with a break above that targeting the top of a channel established from the June 4 low at 1487.10. Alternatively, a break below trend line support (now at 1442.10) exposes 1422.40.
Daily Chart - Created Using FXCM Marketscope 2.0
CRUDE OIL – Prices bounced from support at 89.44, the 38.2% Fibonacci expansion, to challenge the 23.6% level at 93.60. A break above this barrier exposes the underside of a rising channel set from early July, now at 96.22. Alternatively, a reversal through support targets the 50% Fib at 86.04.
Daily Chart - Created Using FXCM Marketscope 2.0
GOLD – Prices remain range-bound after taking out resistance at a falling trend line connecting major swing highs since early November 2011. Near-term resistance is at 1790.55-1802.80 area, with a break above that exposing 1850.00 and the 1900.00. The trend line – now at 1747.80 – has been recast as support and is reinforced by the 23.6% Fibonacci retracement at 1737.59. A push below the latter boundary targets 1704.25 and 1677.30, the 38.2% and 50% Fibonacci retracements respectively.
Daily Chart - Created Using FXCM Marketscope 2.0
US DOLLAR – Prices edged above resistance at 9857, the 38.2% Fibonacci retracement, with the bulls now challenging the top of a minor rising channel set from mid-September. This barrier is reinforced by the 50% Fib at 9893, with a break above the latter level exposing the 61.8% retracement at 9929. The 9857 level has been recast as near-term support, with a push back below that targeting the channel bottom at 9798.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
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