THE TAKEAWAY: The US Dollar has returned to resistance that capped last week’s attempt at a recovery while S&P 500 chart positioning hints a larger recovery may be ahead.

Don’t have access to the Dow Jones FXCM US Dollar Index? Try the USD basket via Mirror Trader as an alternative. **

US DOLLAR TECHNICAL ANALYSIS – Prices recovered from support at 10650, the August 8 low, taking out resistance atthe 23.6% Fibonacci expansion (10708). Bulls are now testing the 38.2% level at 10744, with a push above this exposing the 50% Fib at 10774. The 10708 mark has been recast as near-term support, with a move back beneath that eyeing 10650 anew.

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 Bullish Engulfing candlestick pattern, hinting a move higher is ahead. Initial resistance is at 1669.80, the 23.6% Fibonacci expansion. A break above that targets the 1687.40-91.80 area, marked by the 38.2% level and the May 22 high. Near-term support is at 1634.30, the August 22 low.

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS – Prices put in a bearish Dark Cloud Cover candlestick pattern below resistance at 1376.28, the 61.8% Fibonacci expansion, hinting a reversal lower may be ahead. Negative RSI divergence bolsters the case for a downside scenario. Near-term rising channel support is at 1366.30, followed by the 50% Fibat 1356.22. A break beneath the latter level targets the 38.2% level at 1336.76. Alternatively, a reversal above 1376.28 aims for the 76.4% expansion at 1400.72.

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL TECHNICAL ANALYSIS– Prices declined after putting in a Bearish Engulfing candlestick pattern, taking out the bottom of a Triangle chart pattern to expose the 38.2% Fibonacci retracement at 102.70. A further push beneath that eyes the 50% level at 100.79. Alternatively, a turn back above the Triangle bottom (now at 105.18) aims for the formation’s upper boundary at 108.01.

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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