Dollar Mounts Recovery as S&P 500 Sets New 6-Week Low

THE TAKEAWAY: The US Dollar is attempting to launch a recovery after another test of Augusts’ swing bottom while the S&P 500 has set a new six-week low.

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 recovered from support at 10650, the August 8 low, taking out resistance atthe 23.6% Fibonacci expansion (10708). Bulls are now testing the 38.2% level at 10744, with a push above this exposing the 50% Fib at 10774. The 10708 mark has been recast as near-term support, with a move back beneath that eyeing 10650 anew.

Forex_Dollar_Mounts_Recovery_as_SP_500_Sets_New_6-Week_Low_body_Picture_5.png, Dollar Mounts Recovery as S&P 500 Sets New 6-Week Low

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. Sellers are now testing support at 1634.30, the 50% Fibonacci retracement, with a break beneath that targeting the 61.8% level at 1616.60. Near-term resistance is at 1652.10, the 38.2% Fib.

Forex_Dollar_Mounts_Recovery_as_SP_500_Sets_New_6-Week_Low_body_Picture_6.png, Dollar Mounts Recovery as S&P 500 Sets New 6-Week Low

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.

Forex_Dollar_Mounts_Recovery_as_SP_500_Sets_New_6-Week_Low_body_Picture_7.png, Dollar Mounts Recovery as S&P 500 Sets New 6-Week Low

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL TECHNICAL ANALYSIS– Prices pulled back after putting in a Bearish Engulfing candlestick pattern, taking out the bottom of a Triangle chart pattern to expose the 38.2% Fibonacci retracement at 102.70. A further push beneath that eyes the 50% level at 100.79. Alternatively, a turn back above the Triangle top (now at 104.80) aims for the formation’s upper boundary at 108.05.

Forex_Dollar_Mounts_Recovery_as_SP_500_Sets_New_6-Week_Low_body_Picture_8.png, Dollar Mounts Recovery as S&P 500 Sets New 6-Week Low

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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