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S&P 500 Extends Rebound as US Dollar Sinks Past Chart Support

S&P 500 Extends Rebound as US Dollar Sinks Past Chart Support

2012-10-17 03:13:00
Ilya Spivak, Head Strategist, APAC
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THE TAKEAWAY: The S&P 500 continued to recover after producing a bullish reversal technical signal yesterday, while the US Dollar has reversed lower to take out initial support.

S&P 500 – Prices pushed higher as expected after putting in a Bullish Engulfing candlestick pattern above trend-defining support at 1424.90, marked by the March 27 swing high and the bottom of a rising channel set from the June bottom. Initial resistance is at 1466.10, defined by the underside of a previously broken rising trend line and the range top prevailing since mid-September. A further push above that threatens to expose the 1500 figure. Alternatively, a drop below support initially targets the 1400 level.

SP_500_Extends_Rebound_as_US_Dollar_Sinks_Past_Chart_Support_body_Picture_5.png, S&P 500 Extends Rebound as US Dollar Sinks Past Chart Support

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL Prices are testing resistance at the would-be neckline of an inverse Head and Shoulders bottom (92.38), with a break higher implying a measured upside target at 97.84. Support stands at 87.66, the 38.2% Fibonacci retracement. A drop below that targets the 50% level at 83.76.

SP_500_Extends_Rebound_as_US_Dollar_Sinks_Past_Chart_Support_body_Picture_6.png, S&P 500 Extends Rebound as US Dollar Sinks Past Chart Support

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD Prices corrected higher to retest support-turned-resistance at 1747.20, 23.6% Fibonacci retracement, with a break to the upside aiming to challenge the underside of a previously broken Rising Wedge pattern (now at 1767.81). Support is at 1717.13, the 38.2% level. A drop below that exposes 1700/oz figure and the 50% Fib at 1692.82.

SP_500_Extends_Rebound_as_US_Dollar_Sinks_Past_Chart_Support_body_Picture_7.png, S&P 500 Extends Rebound as US Dollar Sinks Past Chart Support

Daily Chart - Created Using FXCM Marketscope 2.0

Want to learn more about RSI? Watch this Video.

US DOLLAR Prices turned lower from resistance in the 9928-38 area, marked by the late August swing bottom and the top of a falling channel set from the early June high. Sellers have now broken rising trend line support set from the September 14 low, exposing the next downside objective at 9823. A further push below that targeting 9740. Alternatively, a reversal through resistance initially aiming for 9985.

SP_500_Extends_Rebound_as_US_Dollar_Sinks_Past_Chart_Support_body_Picture_8.png, S&P 500 Extends Rebound as US Dollar Sinks Past Chart Support

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

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