THE TAKEAWAY: US Dollar technical positioning shows early signs of a possible turn lower. The S&P 500 has overturned the bearish breakout triggered three weeks ago.

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

US DOLLAR TECHNICAL ANALYSIS – Prices broke above resistance at 10946, the 100% Fibonacci expansion, opening the door for a move higher to challenge the 123.6% level at 11016. Early signs of negative RSI divergence warn of ebbing bullish momentum however and hint a turn lower may be ahead. The 10946 mark has been recast as near-term support, with a move back beneath that aiming for the 10848-77 area (marked by the late-May top).

Forex_Dollar_Vulnerability_Emerges_SP_500_Overturns_Bearish_Break_body_Picture_5.png, Dollar Vulnerability Emerges, S&P 500 Overturns Bearish Break

Daily Chart - Created Using FXCM Marketscope 2.0

S&P 500 TECHNICAL ANALYSIS – Prices moved higher as expected after putting in a bullish Piercing Line candlestick pattern. The bulls have now overtaken trend line support-turned-resistance set from mid-November 2012 to challenge the 61.8% Fibonacci expansion at 1652.90. A break above that targets the 76.4% level at 1675.10. Alternatively, a move back below the trend line (1643.70) aims for the 50% Fib at 1617.10.

Forex_Dollar_Vulnerability_Emerges_SP_500_Overturns_Bearish_Break_body_Picture_6.png, Dollar Vulnerability Emerges, S&P 500 Overturns Bearish Break

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS Prices are edging higher after putting in a Bullish Engulfing candlestick pattern. Initial resistance is at 1252.80, the 23.6% Fibonacci retracement. A break above that targets the 38.2% level at 1297.75. Near-term trend line support is at 1226.82, with a push beneath that eyeing swing lows at 1208.10 and 1180.15.

Forex_Dollar_Vulnerability_Emerges_SP_500_Overturns_Bearish_Break_body_Picture_7.png, Dollar Vulnerability Emerges, S&P 500 Overturns Bearish Break

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL TECHNICAL ANALYSIS Prices advanced as expected after putting in a bullish Piercing Line candlestick pattern above trend line support. The bulls have now overcome the 78.6% Fibonacci expansion at 103.35, exposing the 100% level at 106.26. The 103.35 level has been recast as near-term support, with a move back beneath that eyeing the 61.8% Fibat 101.07.

Forex_Dollar_Vulnerability_Emerges_SP_500_Overturns_Bearish_Break_body_Picture_8.png, Dollar Vulnerability Emerges, S&P 500 Overturns Bearish Break

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

To be added to Ilya's e-mail distribution list, please CLICK HERE

New to FX? Watch this Video. For live market updates, visit the Real Time News Feed