Dollar Sets Sights on New 3-Year High, S&P 500 Gains Corrective

THE TAKEAWAY: The US Dollar is aiming to set another three-year high while recent S&P 500 gains continue to look corrective in the context of a larger decline.

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US DOLLAR TECHNICAL ANALYSIS – Prices narrowly edged above resistance at 10980, the 100% Fibonacci expansion, opening the door for a move higher to challenge the 123.6% level at 11101. The 10980 mark has been recast as near-term support. A reversal back beneath that aims for the 76.4% expansion at 10859.

Forex_Dollar_Sets_Sighs_on_New_3-Year_High_SP_500_Gains_Corrective_body_Picture_5.png, Dollar Sets Sights on New 3-Year High, S&P 500 Gains Corrective

Daily Chart - Created Using FXCM Marketscope 2.0

S&P 500 TECHNICAL ANALYSIS – Prices moved higher as expected after putting in a bullish Piercing Line candlestick pattern. Near-term resistance is at 1638.40, the 61.8% Fibonacci retracement. A break above that initially exposes the 76.4% level at 1657.10. Near-term support is at 1623.30, the 50% Fib. Gains are seen as corrective absent a daily close above support-turned-resistance at a rising trend line set from mid-November 2012 (now at 1640.80).

Forex_Dollar_Sets_Sighs_on_New_3-Year_High_SP_500_Gains_Corrective_body_Picture_6.png, Dollar Sets Sights on New 3-Year High, S&P 500 Gains Corrective

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS – Prices turned lower anew, with sellers challenging support marked by the 23.6% Fibonacci expansion at 1209.88. A break beneath that initially targets the 38.2% level at 1174.32. Near-term resistance is at 1267.36, the July 2 swing high.

Forex_Dollar_Sets_Sighs_on_New_3-Year_High_SP_500_Gains_Corrective_body_Picture_7.png, Dollar Sets Sights on New 3-Year High, S&P 500 Gains Corrective

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL TECHNICAL ANALYSIS– Prices advanced as expected after putting in a bullish Piercing Line candlestick pattern above trend line support. A break above the 76.4% Fibonacci expansion at 103.06 has exposed the 100% level at 106.26. Alternatively, a reversal back beneath 103.06 sees the next layer of support at 101.07, the 61.8% Fib.

Forex_Dollar_Sets_Sighs_on_New_3-Year_High_SP_500_Gains_Corrective_body_Picture_8.png, Dollar Sets Sights on New 3-Year High, S&P 500 Gains Corrective

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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