US Dollar Finds a Lifeline, S&P 500 Treading Water at 1700

DailyFX

THE TAKEAWAY: The US Dollar advanced for a second consecutive day to yield its best run higher in two weeks but the move is yet to overturn last week’s bearish breakout.

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 advanced as expected after putting in a Bullish Engulfing candlestick pattern. A break above initial resistance is at 10735, the 23.6% Fibonacci retracement, has exposed the 10779-87 area, marked by the underside of a rising trend line set from mid-June and the 38.2% level. A push beyond that aims for the 50% level at 10830. Alternatively, a move back below 10735 eyes the August 8 lowat 10650.

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Forex_US_Dollar_Finds_a_Lifeline_SP_500_Treading_Water_at_1700_body_Picture_5.png, US Dollar Finds a Lifeline, S&P 500 Treading Water at 1700

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 pulled back as expected after putting in a Hanging Man candlestick. Sellers are now testing support is at 1687.40, the May 22 high, with a break downward targeting the 23.6% Fibonacci retracement at 1674.10. Near-term support-turned-resistance is at the recently broken bottom of a rising channel set from mid-July, now at 1697.40. A move above that exposes the August 8 high at 1709.60.

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Forex_US_Dollar_Finds_a_Lifeline_SP_500_Treading_Water_at_1700_body_Picture_6.png, US Dollar Finds a Lifeline, S&P 500 Treading Water at 1700

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS Prices broke resistance at a falling trend line set from early May, exposing the 38.2% Fibonacci expansion at 1336.76. A break above that targets the 50% level at 1356.52. Near-term support is at 1312.32, the 23.6% level, with a reversal back beneath that eying the August 7 low at 1272.81.

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Forex_US_Dollar_Finds_a_Lifeline_SP_500_Treading_Water_at_1700_body_Picture_7.png, US Dollar Finds a Lifeline, S&P 500 Treading Water at 1700

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL TECHNICAL ANALYSIS Prices have been edging lower within the bounds of what may be a Flag chart pattern, a setup indicative of counter-trend correction preceding resumption of the longer-term advance. A push above near-term resistance at 106.04, the 23.6% Fibonacci expansion, has exposed the Flag top at 106.92. A push beyond that targets the 38.2% level at 108.40. Alternatively, a move back below 106.04 aims for the August 8 low at 102.21, followed by the Flag bottom at 101.61.

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Forex_US_Dollar_Finds_a_Lifeline_SP_500_Treading_Water_at_1700_body_Picture_8.png, US Dollar Finds a Lifeline, S&P 500 Treading Water at 1700

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

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