Dollar Treading Water Before FOMC Minutes as S&P 500 Corrects

DailyFX

THE TAKEAWAY: The US Dollar is trading sideways as traders await the outcome of Wednesday’s FOMC minutes release while the S&P 500 has attempted a cautious recovery.

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 are treading water above support at 10650, the August 8 low. Near-term resistance is at 10708,the 23.6% Fibonacci expansion, with a break above that targeting the 38.2% level at 10744. Alternatively, a move below support eyes the bottom of a falling channel set from early July, now at 10598. Broadly speaking, the standstill likely reflects traders’ unwillingness to commit to a directional bias ahead of Wednesday’s FOMC minutes publication.

View gallery

.
Forex_Dollar_Treading_Water_Before_FOMC_Minutes_as_SP_500_Corrects_body_Picture_5.png, Dollar Treading Water Before FOMC Minutes as S&P 500 Corrects

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 declined as expected after putting in a Hanging Man candlestick. The index is now retesting support-turned-resistance at 1652.10, the 38.2% Fibonacci retracement, with a break back above this barrier exposing the 23.6% retracement at 1674.10. Alternative, renewed downward momentum sees the next downside objective is at 1634.30, the 50% level.

View gallery

.
Forex_Dollar_Treading_Water_Before_FOMC_Minutes_as_SP_500_Corrects_body_Picture_6.png, Dollar Treading Water Before FOMC Minutes as S&P 500 Corrects

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 support is at 1356.22, the 50% Fib, with a break beneath that targeting the 38.2% level at 1336.76. Alternatively, a reversal above 1376.28 aims for the 76.4% expansion at 1400.72.

View gallery

.
Forex_Dollar_Treading_Water_Before_FOMC_Minutes_as_SP_500_Corrects_body_Picture_7.png, Dollar Treading Water Before FOMC Minutes as S&P 500 Corrects

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL TECHNICAL ANALYSIS Prices pulled back after putting in a Bearish Engulfing candlestick pattern below resistance at the top of a Triangle chart pattern, a barrier reinforced by the 38.2% Fibonacci expansion at 108.40. Sellers are now testing Triangle support at 104.71, with a break beneath that initially exposing the 38.2% Fib retracement at 102.70. Alternatively, a reversal above 108.40 aims for the 50% expansion at 110.32. On balance, a Triangle is typically indicative of trend continuation, which in this case carries bullish implications, though confirmation is absent for now.

View gallery

.
Forex_Dollar_Treading_Water_Before_FOMC_Minutes_as_SP_500_Corrects_body_Picture_8.png, Dollar Treading Water Before FOMC Minutes as S&P 500 Corrects

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.

Rates

View Comments (0)