Dollar Vulnerable to Deeper Losses, SPX 500 Pullback Hinted

2013-10-24 03:26:00

Ilya Spivak, Head Strategist, APAC

Talking Points

US Dollar Eyeing 16-Month Support After April Bottom Break
S&P 500 Technical Positioning Hints a Pullback May Be Ahead
Gold Prices Finding Interim Resistance Below $1350/oz Level

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Can’t access to the Dow Jones FXCM US Dollar Index? Try the USD basket on Mirror Trader. **

US DOLLAR TECHNICAL ANALYSIS – Prices broke below the 10391-424 area, the April swing bottom, to expose resistance-turned-support marked by the June 1 2012 swing high (10323). Alternatively, a reversal back above 10424 eyes the June 2013 bottom at 10469.

Forex_Dollar_Vulnerable_to_Deeper_Losses_SPX_500_Pullback_Hinted_body_Picture_5.png, Dollar Vulnerable to Deeper Losses, SPX 500 Pullback Hinted

Daily Chart - Created Using FXCM Marketscope 2.0

** The Dow Jones FXCM US Dollar Index and the Mirror Trader USD basket are not the same product.

S&P 500 TECHNICAL ANALYSIS – Prices recovered as expected after showing a Spinning Top candlestick at support marked by a rising trend line set from late February. Buyers are now testing resistance at 1754.40, the 100% Fibonacci expansion, with a Harami candlestick pattern warning a pullback may be ahead. Near-term support is at 1729.00, the 76.4% Fib.Alternatively, a push above resistance aims for the 123.6% level at 1779.80.

Forex_Dollar_Vulnerable_to_Deeper_Losses_SPX_500_Pullback_Hinted_body_Picture_6.png, Dollar Vulnerable to Deeper Losses, SPX 500 Pullback Hinted

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS – Prices broke higher as expected after putting in a bullish Morning Star candlestick pattern. Resistance is now at 1342.57, the 50% Fibonacci retracement, with a break above that targeting the 61.8% level at 1364.06. Near-term support is at 1321.09, the 38.2% Fib. A reversal back beneath that eyes the 23.6% Fib at 1294.51.

Forex_Dollar_Vulnerable_to_Deeper_Losses_SPX_500_Pullback_Hinted_body_Picture_7.png, Dollar Vulnerable to Deeper Losses, SPX 500 Pullback Hinted

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL TECHNICAL ANALYSIS– Prices continued to move lower as expected, taking out support at the 38.2% Fibonacci retracement (98.86) to expose the bottom of a channel set from late August (now at 96.82). A break below that aims for the 50% Fib at 94.73. Alternatively, a reversal back above 98.86 eyes the September 14 2012 swing top at 100.40.