DailyFX

Dollar Looking for Direction, S&P 500 Setup Favors Weakness

Ilya Spivak

THE TAKEAWAY: The US Dollar is in consolidation mode below a two-year high. S&P 500 technical positioning continues to favor the downside.

US DOLLAR TECHNICAL ANALYSIS– Prices are consolidating having found resistance at the top of a rising channel set from early February. Negative RSI divergence warns of weakness ahead, with a break below the channel bottom (now at 10390) initially exposing the 14.6% Fibonacci retracement support at 10367. Near-term resistance is at 10444, the February 25 high, with a move above that aiming for the channel top at 10493.

Forex_Dollar_Looking_for_Direction_SP_500_Setup_Favors_Weakness_body_Picture_5.png, Dollar Looking for Direction, S&P 500 Setup Favors Weakness
Forex_Dollar_Looking_for_Direction_SP_500_Setup_Favors_Weakness_body_Picture_5.png, Dollar Looking for Direction, S&P 500 Setup Favors Weakness

Daily Chart - Created Using FXCM Marketscope 2.0

S&P 500 TECHNICAL ANALYSIS – Prices rebounded from support at 1486.90, the 23.6% Fibonacci retracement, to recapture the 1500 figure. Near-term rising trend line support-turned-resistance is at 1535.30. A Bearish Engulfing candlestick pattern at the February 20 top remains valid however, marking the current advance as corrective in the context of a broader bearish bias absent a close above the pattern’s high (1531.60). A drop below 1486.90 exposes the 38.2% Fib at 1459.20.

Forex_Dollar_Looking_for_Direction_SP_500_Setup_Favors_Weakness_body_Picture_6.png, Dollar Looking for Direction, S&P 500 Setup Favors Weakness
Forex_Dollar_Looking_for_Direction_SP_500_Setup_Favors_Weakness_body_Picture_6.png, Dollar Looking for Direction, S&P 500 Setup Favors Weakness

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS – Prices turned lower anew after putting in a Dark Cloud Cover candlestick pattern, taking out support at the 23.6% Fibonacci expansion at 1589.36. Sellers now target the 38.2% level at 1570.37, with a break below that exposing the intersection of the May 16 2012 close and the 61.8% Fib at 1539.35. Alternatively, a move back above 1589.36 aims for the 1600/oz figure and the February 26 high at 1620.09.

Forex_Dollar_Looking_for_Direction_SP_500_Setup_Favors_Weakness_body_Picture_7.png, Dollar Looking for Direction, S&P 500 Setup Favors Weakness
Forex_Dollar_Looking_for_Direction_SP_500_Setup_Favors_Weakness_body_Picture_7.png, Dollar Looking for Direction, S&P 500 Setup Favors Weakness

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL TECHNICAL ANALYSIS– Prices are pushing lower toward support at 91.13, the 50% Fibonacci retracement. A break below that exposes the 61.8% level at 89.45. Near-term resistance is at 92.80, the 38.2 % Fib, with a reversal back above that aiming for the 23.6% retracement at 94.87.

Forex_Dollar_Looking_for_Direction_SP_500_Setup_Favors_Weakness_body_Picture_8.png, Dollar Looking for Direction, S&P 500 Setup Favors Weakness
Forex_Dollar_Looking_for_Direction_SP_500_Setup_Favors_Weakness_body_Picture_8.png, Dollar Looking for Direction, S&P 500 Setup Favors Weakness

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

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.

and

Recommended Stories