DailyFX

US Dollar Coils Up for a Breakout, SPX 500 Takes Aim at 1800

Ilya Spivak

Talking Points:

  • US Dollar Coiling Up for a Breakout, Upside Scenario Still Favored

  • S&P 500 Aiming Above 1800 After Clearing Chart Resistance Level

  • Gold, Crude Oil Technical Positioning Hints Gains Possible Ahead

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

US DOLLAR TECHNICAL ANALYSIS – Prices pulled back to retest resistance-turned-support in the 10556-65 area, marked by the top of a falling channel set from July and a horizontal barrier in play since late September. A break downward initially eyes the November 6 low at 10492. Near-term resistance is at 10653, the 23.6% Fibonacci expansion, with a push above that targeting the 38.2% level at 10839.

Forex_US_Dollar_Coils_Up_for_a_Breakout_SPX_500_Takes_Aim_at_1800_body_Picture_5.png, US Dollar Coils Up for a Breakout, SPX 500 Takes Aim at 1800
Forex_US_Dollar_Coils_Up_for_a_Breakout_SPX_500_Takes_Aim_at_1800_body_Picture_5.png, US Dollar Coils Up for a Breakout, SPX 500 Takes Aim at 1800

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 broke resistance at 1790.50, 38.2%Fibonacci expansion, exposing the 50% level at 1806.10. Negative RSI divergence warns of ebbing bullish momentum however, hinting at the threat of a reversal ahead. A turn back below 1790.50 targets the 23.6% Fib at 1771.30.

Forex_US_Dollar_Coils_Up_for_a_Breakout_SPX_500_Takes_Aim_at_1800_body_Picture_6.png, US Dollar Coils Up for a Breakout, SPX 500 Takes Aim at 1800
Forex_US_Dollar_Coils_Up_for_a_Breakout_SPX_500_Takes_Aim_at_1800_body_Picture_6.png, US Dollar Coils Up for a Breakout, SPX 500 Takes Aim at 1800

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS – Prices started to drift higher as expected after showing a bullish Piercing Line candlestick pattern. A break above falling channel top resistance (now at 1287.49) initially exposes 1303.36, the 38.2% Fibonacci expansion. Near-term support is at 1261.28, the November 12 low.

Forex_US_Dollar_Coils_Up_for_a_Breakout_SPX_500_Takes_Aim_at_1800_body_Picture_7.png, US Dollar Coils Up for a Breakout, SPX 500 Takes Aim at 1800
Forex_US_Dollar_Coils_Up_for_a_Breakout_SPX_500_Takes_Aim_at_1800_body_Picture_7.png, US Dollar Coils Up for a Breakout, SPX 500 Takes Aim at 1800

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL TECHNICAL ANALYSIS– Prices continue to consolidate above support at 93.05, the November 5 low, 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 93.05 targets the channel bottom at 90.89.

Forex_US_Dollar_Coils_Up_for_a_Breakout_SPX_500_Takes_Aim_at_1800_body_Picture_8.png, US Dollar Coils Up for a Breakout, SPX 500 Takes Aim at 1800
Forex_US_Dollar_Coils_Up_for_a_Breakout_SPX_500_Takes_Aim_at_1800_body_Picture_8.png, US Dollar Coils Up for a Breakout, SPX 500 Takes Aim at 1800

Daily Chart - Created Using FXCM Marketscope 2.0

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

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