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US Dollar Rally Stumbles, SPX 500 at Risk of Downturn

US Dollar Rally Stumbles, SPX 500 at Risk of Downturn

2013-11-27 07:26:00
Ilya Spivak, Head Strategist, APAC
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Talking Points:

  • US Dollar Stumbles at November Top as Expected
  • S&P 500 Chart Setup Warns of Reversal Downward
  • Crude Oil Edging Back to November Swing Bottom

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

US DOLLAR TECHNICAL ANALYSIS – Prices pulled back as expected, forming a bearish Dark Cloud Cover candlestick patter below resistance in the 10641-53 area marked by the November 12 high and the 23.6% Fibonacci expansion. Initial support is at 10589, the 23.6% Fib retracement, with a break below that targeting the 38.2% mark at 10589. Alternatively, a turn above 10653 aims for the 38.2% expansion at 10839.

Forex_US_Dollar_Rally_Stumbles_SPX_500_at_Risk_of_Downturn_body_Picture_5.png, US Dollar Rally Stumbles, SPX 500 at Risk of Downturn

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 put in a Shooting Star candlestick below resistance at 1808.20, the 150% Fibonacci expansion, hinting a turn lower may be ahead. Negative RSI divergence and the outlines of a Rising Wedge chart formation reinforce the case for a downside scenario. Initial support is at 1798.50, the 138.2% Fib, with a break below that eyeing the 123.6% level at 1779.80. A push above resistance targets the 161.8% expansion at 1820.80.

Forex_US_Dollar_Rally_Stumbles_SPX_500_at_Risk_of_Downturn_body_Picture_6.png, US Dollar Rally Stumbles, SPX 500 at Risk of Downturn

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS Prices bounced from support at 1222.60, the 76.4% Fibonacci expansion. Resistance is at 1256.18, the intersection of the 23.6% Fib retracement and a falling trend line set from late October. A break above that targets the 38.2% retracement at 1276.35. Alternatively, a reversal below support eyes the $1200/oz figure and the 100% expansion at 1179.63.

Forex_US_Dollar_Rally_Stumbles_SPX_500_at_Risk_of_Downturn_body_Picture_7.png, US Dollar Rally Stumbles, SPX 500 at Risk of Downturn

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL TECHNICAL ANALYSIS Prices continue to consolidate above the November 14 low 92.49, with positive RSI divergence hinting a reversal higher may be in the works. Initial resistance at 94.47, marked the top of a falling channel set from late August. A break above that initially exposes the 14.6% Fibonacci retracement at 95.37. Alternatively, a move below 92.49 targets the 38.2% Fib expansion at 91.06.

Forex_US_Dollar_Rally_Stumbles_SPX_500_at_Risk_of_Downturn_body_Picture_8.png, US Dollar Rally Stumbles, SPX 500 at Risk of Downturn

Daily Chart - Created Using FXCM Marketscope 2.0

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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