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US Dollar, SPX 500 Sink in Tandem as Gold Continues to Look Vulnerable

US Dollar, SPX 500 Sink in Tandem as Gold Continues to Look Vulnerable

Ilya Spivak, Head Strategist, APAC

Talking Points:

  • US Dollar Hits 6-Month Low After Another Dramatic Decline
  • S&P 500 Slumps Back to Recent Range Bottom Above 1850
  • Gold Continues to Look Vulnerable on Triangle Chart Setup

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

US DOLLAR TECHNICAL ANALYSISPrices issued their largest drop in a month, bringing greenback to the weakest level since October 2013. Sellers now aim to challenge the 38.2% Fibonacci expansion at 10359. A break below this barrier exposes the bottom of a falling channel guiding the down trend since the beginning of the year, now at 10339. Alternatively, a move back above the 23.6% level at 10411 aims for the 14.6% Fib at 10443.

US Dollar, SPX 500 Sink in Tandem as Gold Continues to Look Vulnerable

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 rebounded as expected after putting in a Piercing Line candlestick pattern. Prices have pulled back to support at 1868.70, the 23.6% Fibonacci expansion, with break below that aiming for the April 28 low at 1850.10. Alternatively, a reversal above the 38.2% level at 1880.30 targets the 50% Fib at 1889.60.

US Dollar, SPX 500 Sink in Tandem as Gold Continues to Look Vulnerable

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS – Prices are approaching resistance at 1318.69, marked by the top of a descending Triangle chart formation and the 23.6% Fibonacci expansion. A break above this barrier targets the 38.2% level at 1349.81. The descending Triangle argues in favor of bearish continuation however (though confirmation is absent for now). Near-term support is at 1277.00, the Triangle bottom.

US Dollar, SPX 500 Sink in Tandem as Gold Continues to Look Vulnerable

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL TECHNICAL ANALYSIS – Prices are turned sharply lower below the 105.00 figure, sinking to challenge support at 98.96 marked by the 76.4% Fibonacci expansion. A break below this boundary initially exposes the 100% level at 97.11. Near-term resistance is at 100.11, the 61.8% Fib, followed by the 50% expansion at 101.04.

US Dollar, SPX 500 Sink in Tandem as Gold Continues to Look Vulnerable

Daily Chart - Created Using FXCM Marketscope 2.0

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

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

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