THE TAKEAWAY: Recoveries in the US Dollar and the S&P 500 proved short-lived as expected, with prices reversing lower after testing the first layer of chart resistance.

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US DOLLAR TECHNICAL ANALYSIS – Prices moved lower as expected after putting in a Bearish Engulfing candlestick pattern. A mild recovery faltered at resistance marked by the 38.2% Fibonacci retracement at 10655. Sellers now challenge a key support cluster in the 10510-576 area, marked by a longer-term 38.2% Fib, the March 8 high, and a rising trend line set from mid-December 2012. A drop beneath that initially aims for the 50% level at 10397.

Daily Chart - Created Using FXCM Marketscope 2.0

S&P 500 TECHNICAL ANALYSIS – A rebound from support marked by the 23.6% Fibonacci retracement (1605.90) and a rising trend line set from mid-November 2012 was cut short at the top of a falling channel set from late May. Renewed selling pressure that takes prices below 1605.90 from here initially exposes the channel bottom at 1588.90. Alternatively, a move above the channel top (now at 1638.90) aims for minor 38.2% Fib resistance at 1655.40.

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS – Prices moved lower as expected, taking out rising channel to challenge an upward-sloping trend line set from the April 16 low (now at 1370.41). This barrier is reinforced by the 38.2% Fibonacci expansion at 1366.43, with a push through it eyeing the 50% level at 1348.74. Channel support-turned-resistance is at 1405.77, followed by the 50% Fib expansion at 1413.03.

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL TECHNICAL ANALYSIS – Prices dropped back below the 38.2% Fibonacci expansion at 95.71, exposing the 23.6% level at 94.00 anew. Continued selling beyond that targets the June 3 low at 91.23, with a close below that on a daily basis overturning the bullish implications of a Piercing Line candlestick pattern. Alternatively, a move back above 95.71 aims for the 96.63-97.09 area, marked by a falling trend line and the 50% expansion.

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

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