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US Dollar Chart Hints Prices Vulnerable to Downward Reversal

US Dollar Chart Hints Prices Vulnerable to Downward Reversal

2013-05-27 02:26:00
Ilya Spivak, Head Strategist, APAC
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THE TAKEAWAY: The US Dollar technical positioning warns that prices are vulnerable to a downward reversal after touching the highest level in nearly three years last week.

Capitalize on Shifts in Market Mood with the DailyFX Speculative Sentiment Index.

US DOLLAR TECHNICAL ANALYSIS Prices put in a Dark Cloud Cover candlestick pattern, hinting a move lower may be ahead. Negative RSI divergence reinforces the case for a downside scenario. Initial support is at 10763, the 23.6% Fibonacci retracement, with a break below that targeting the 38.2% level at 10694. Near-term resistance is at 10876, the May 23 high.

Forex_US_Dollar_Chart_Hints_Prices_Vulenrable_to_Doward_Reversal_body_Picture_5.png, US Dollar Chart Hints Prices Vulnerable to Downward Reversal

Daily Chart - Created Using FXCM Marketscope 2.0

S&P 500 TECHNICAL ANALYSIS – Prices are testing support in the 1649.60-51.60 area, marked by the 23.6% Fibonacci retracement and the 100% expansion. A break below this barrier initially exposes the 38.2% retracement at 1629.40. Near-term resistance is at 1676.50, the 123.6% expansion, with a reversal above that eyeing the 138.2% mark at 1693.10.

Forex_US_Dollar_Chart_Hints_Prices_Vulenrable_to_Doward_Reversal_body_Picture_6.png, US Dollar Chart Hints Prices Vulnerable to Downward Reversal

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS Prices completed a Bullish Engulfing candlestick pattern above support at 1348.97, the 38.2% Fibonacci retracement level, hinting at gains ahead. Initial resistance is at 1402.11, the 23.6% level, with a break above that targeting the 14.6% Fib at 1434.86 and the May 3 high at 1488.00. Alternatively, a move below support eyes the 50% expansion at 1306.02.

Forex_US_Dollar_Chart_Hints_Prices_Vulenrable_to_Doward_Reversal_body_Picture_7.png, US Dollar Chart Hints Prices Vulnerable to Downward Reversal

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL TECHNICAL ANALYSIS Prices moved lower as expected after putting in a bearish Dark Cloud Cover candlestick pattern. Sellers are now testing below a horizontal support shelf at 93.84, with a break below that exposing swing lows in the 92.11-19 area. Near-term resistance is at 96.87, marked by a falling trend line set from mid-September 2012.

Forex_US_Dollar_Chart_Hints_Prices_Vulenrable_to_Doward_Reversal_body_Picture_8.png, US Dollar Chart Hints Prices Vulnerable to Downward Reversal

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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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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