DailyFX

Dollar Takes Aim at Monthly High, SPX 500 Reversal Risk Remains

Ilya Spivak

Talking Points:

  • US Dollar Moves to Challenge November Swing Top

  • S&P 500 Sets New High But Reversal Risk Remains

  • Gold Vulnerable to Deeper Losses, Oil May Recover

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

US DOLLAR TECHNICAL ANALYSIS – Prices rebounded from resistance-turned-support at the top of a falling channel set from July (now in the 10493-521 area) as expected. Near-term resistance is in the 10641-53 region, marked by the November 12 high and the 23.6% Fibonacci expansion. A push above that targets the 38.2% level at 10839.

Forex_Dollar_Takes_Aim_at_Monthly_High_SPX_500_Reversal_Risk_Remains_body_Picture_5.png, Dollar Takes Aim at Monthly High, SPX 500 Reversal Risk Remains
Forex_Dollar_Takes_Aim_at_Monthly_High_SPX_500_Reversal_Risk_Remains_body_Picture_5.png, Dollar Takes Aim at Monthly High, SPX 500 Reversal Risk Remains

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 are testing resistance at 1808.20, the 150% Fibonacci expansion, with a break upward targeting the 161.8% level at 1820.80. Negative RSI divergence continues to warn of ebbing upward momentum, hinting a reversal may be around the corner. Near-term support is at 1795.50, the 138.2% Fib. A reversal back beneath that aims for the 123.6% expansion at 1779.80.

Forex_Dollar_Takes_Aim_at_Monthly_High_SPX_500_Reversal_Risk_Remains_body_Picture_6.png, Dollar Takes Aim at Monthly High, SPX 500 Reversal Risk Remains
Forex_Dollar_Takes_Aim_at_Monthly_High_SPX_500_Reversal_Risk_Remains_body_Picture_6.png, Dollar Takes Aim at Monthly High, SPX 500 Reversal Risk Remains

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS – Prices recoiled from resistance at a falling trend line set from late October. A break below support at 1249.18, the 61.8% Fibonacci expansion, has exposed the 76.4% level at 1222.60. A reversal back above 1249.18 aims for the trend line (now at 1265.38), followed by the 50% Fib at 1270.67.

Forex_Dollar_Takes_Aim_at_Monthly_High_SPX_500_Reversal_Risk_Remains_body_Picture_7.png, Dollar Takes Aim at Monthly High, SPX 500 Reversal Risk Remains
Forex_Dollar_Takes_Aim_at_Monthly_High_SPX_500_Reversal_Risk_Remains_body_Picture_7.png, Dollar Takes Aim at Monthly High, SPX 500 Reversal Risk Remains

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 bounce may be ahead. Initial resistance is at 95.37, marked by the 14.6% Fibonacci expansion and reinforced by the top of a falling channel set from late August. A break above that initially exposes the 23.6% level at 97.14. Alternatively, a move below 92.49 targets the channel bottom at 89.68.

Forex_Dollar_Takes_Aim_at_Monthly_High_SPX_500_Reversal_Risk_Remains_body_Picture_8.png, Dollar Takes Aim at Monthly High, SPX 500 Reversal Risk Remains
Forex_Dollar_Takes_Aim_at_Monthly_High_SPX_500_Reversal_Risk_Remains_body_Picture_8.png, Dollar Takes Aim at Monthly High, SPX 500 Reversal Risk Remains

Daily Chart - Created Using FXCM Marketscope 2.0

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

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