Dollar Selloff Continues Before Pivotal Fed Policy Announcement

DailyFX

Talking Points

  • US Dollar Issues Lowest Close in 3 Months Before FOMC Outcome
  • S&P 500 Continues to March Higher, Testing the Index’s Record High
  • Gold Prices Drop to Seven-Week Low Beneath the $1300/oz Figure

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US DOLLAR TECHNICAL ANALYSIS – Prices broke support at 10620, the 76.4% Fibonacci expansion, exposing a rising trend line set from early April (now at 10574). This barrier is reinforced by the 100% level at 10561. A further push below the latter barrier targets a falling channel bottom at 10528. Near-term resistance is in the 10646-57 area, marked by the August 16 low and the 61.8% expansion.

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Forex_Dollar_Selloff_Continues_Before_Pivotal_Fed_Policy_Announcement_body_Picture_5.png, Dollar Selloff Continues Before Pivotal Fed Policy Announcement

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 took out resistance at 1701.80, the 50% Fibonacci expansion, exposing the August swing high at 1709.60. A push above this barrier targets the 61.8% Fib at 1719.60. The 1701.80 level has been recast as near-term support, with a reversal beneath that eyeing the 38.2% Fib at 1684.10.

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Forex_Dollar_Selloff_Continues_Before_Pivotal_Fed_Policy_Announcement_body_Picture_6.png, Dollar Selloff Continues Before Pivotal Fed Policy Announcement

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS Prices broke below support at 1316.01, the 38.2%Fibonacci expansion, exposing the 50% level at 1279.68. The 1316.01 mark has been recast as near-term resistance, with a reversal back above that eyeing the 1347.52-60.96 region marked by a horizontal pivot as well as the 23.6% expansion.

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Forex_Dollar_Selloff_Continues_Before_Pivotal_Fed_Policy_Announcement_body_Picture_7.png, Dollar Selloff Continues Before Pivotal Fed Policy Announcement

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL TECHNICAL ANALYSIS Prices declined as expected after putting in a bearish Dark Cloud Cover candlestick pattern. A break of support at 105.93, the 23.6% Fibonacci retracement, has exposed the bottom of a rising channel set from early July (now at 104.38). A further push beneath that targets a rising trend line established from mid-April, now at 103.01. The 105.93 level has been recast as near-term resistance, with a turn back above that aiming for the channel top at 110.76.

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Forex_Dollar_Selloff_Continues_Before_Pivotal_Fed_Policy_Announcement_body_Picture_8.png, Dollar Selloff Continues Before Pivotal Fed Policy Announcement

Daily Chart - Created Using FXCM Marketscope 2.0

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

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