THE TAKEAWAY:The US Dollar appears positioned to resume upward momentum after a brief corrective pullback while the S&P 500 continues to drift lower.
US DOLLAR – Prices put in a Hammer candlestick above resistance-turned-support at the upper boundary of a falling channel set from the June 1 high (9901), hinting a push higher is ahead following a corrective pull-back. Initial resistance remains at 9963, the 38.2% Fibonacci retracement, with a push above that exposing the 50% Fib at 10032. Alternatively, a drop below support targets rising trend line support at 9855.
Daily Chart - Created Using FXCM Marketscope 2.0
S&P 500 – Prices are inching lower as expected after putting in a bearish Dark Cloud Cover candlestick pattern below resistance at 1466.10 and clearing trend-defining support at the bottom of a rising channel set from the June low. Sellers now aim to challenge the 38.2% Fibonacci retracement at 1394.30, with a break below that exposing the 50% level at 1369.40. Resistance stands in the 1424.90-1425.10 area, marked by the March 27 high and the 23.6% retracement, with a reversal back above that targeting the channel bottom at 1439.50.
Daily Chart - Created Using FXCM Marketscope 2.0
GOLD – Prices put in a Bullish Engulfing candlestick pattern above support at 1693.06, the 38.2% Fibonacci retracement, hinting a bounce may be ahead. Initial resistance lines up at a falling trend line set from the October 5 swing high (1723.12). A break above that exposes the 1732.33-35.65 area, marked by a horizontal pivot level and the 23.6% Fib. Alternatively, a reversal below support targets the 50% level at 1661.32.
Daily Chart - Created Using FXCM Marketscope 2.0
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CRUDE OIL – Prices continue to push lower as expected after taking out support at 87.66, the 38.2% Fibonacci expansion. Sellers continue to take aim at the 50% level at 83.76, with a break below that exposing the 61.8% Fib at 79.84. The 87.66 mark has been recast as near-term resistance. A reversal back above that targets the psychologically significant 90.00 figure and a falling trend line set from late September, now at 91.78.
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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