US Dollar Clings to Support But Downside Risks Remain
THE TAKEAWAY: The US Dollar has managed to hold up at near-term chart support but technical positioning continues to warn of a downward correction ahead.
Capitalize on Shifts in Market Mood with the DailyFX Speculative Sentiment Index.
US DOLLAR TECHNICAL ANALYSIS– Prices put in a Dark Cloud Cover candlestick pattern, hinting a move lower may be ahead. Negative RSI divergence reinforces the case for a downside scenario. Initial trend line support is at 10788 and is reinforced by the 23.6% Fibonacci retracement at 10763. A break below that targets the 38.2% level at 10694. Near-term resistance is at 10876, the May 23 high.
Daily Chart - Created Using FXCM Marketscope 2.0
S&P 500 TECHNICAL ANALYSIS – Prices are testing support in the 1649.60-51.60 area, marked by the 23.6% Fibonacci retracement and the 100% expansion. A break below this barrier initially exposes the 38.2% retracement at 1629.40. Near-term resistance is at 1676.50, the 123.6% expansion, with a reversal above that eyeing the 138.2% mark at 1693.10.
Daily Chart - Created Using FXCM Marketscope 2.0
GOLD TECHNICAL ANALYSIS – Prices completed a Bullish Engulfing candlestick pattern above support at 1348.97, the 38.2% Fibonacci retracement level, hinting at gains ahead. Initial resistance is at 1402.11, the 23.6% level, with a break above that targeting the 14.6% Fib at 1434.86 and the May 3 high at 1488.00. Alternatively, a move below support eyes the 50% expansion at 1306.02.
Daily Chart - Created Using FXCM Marketscope 2.0
CRUDE OIL TECHNICAL ANALYSIS– Prices moved lower as expected after putting in a bearish Dark Cloud Cover candlestick pattern. Sellers are now testing support at 93.55, the 38.2% Fibonacci expansion, with a break lower exposing the 23.6% level at 92.23. Near-term resistance is at 94.61, the 50% Fib. A reversal above that eyes the 61.8% expansion at 95.68.
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.