US Dollar Bounces at Support, S&P 500 Turns Sharply Lower

THE TAKEAWAY: The US Dollar is staging an impressive recovery from support while the S&P 500 may have at last begun to validate bearish cues in technical positioning.

US DOLLAR TECHNICAL ANALYSIS– Prices are bouncing from support at 10420, the 23.6% Fibonacci retracement, pushing above falling trend line resistance (10454) to challenge the 14.6% Fib expansion at 10509. A break above that exposes the 23.6% expansion at 10569. Alternatively, a reversal below support targets the 38.2% retracement at 10324.

Forex_US_Dollar_Bounces_at_Support_SP_500_Turns_Sharply_Lower_body_Picture_5.png, US Dollar Bounces at Support, S&P 500 Turns Sharply Lower

Daily Chart - Created Using FXCM Marketscope 2.0

S&P 500 TECHNICAL ANALYSIS – Prices broke lower as expected after carving out a bearish Rising Wedge chart pattern below resistance at 1576.10 the index’s record high. Sellers now challenge support at 1552.40, marked by the 23.6% Fibonacci retracement and a rising channel bottom. A break below that aims for the 38.2% level at 1539.20. The Wedge bottom, now at 1567.00, has been recast as near-term resistance.

Forex_US_Dollar_Bounces_at_Support_SP_500_Turns_Sharply_Lower_body_Picture_6.png, US Dollar Bounces at Support, S&P 500 Turns Sharply Lower

8hr Chart - Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS – Prices broke support at 1562.58, the 38.2% Fibonacci expansion, exposing the 50% level at 1545.78. The 1562.58 level has been recast as near-term resistance, with a reversal back above that eyeing the 23.6% Fib at 1583.37.

Forex_US_Dollar_Bounces_at_Support_SP_500_Turns_Sharply_Lower_body_Picture_7.png, US Dollar Bounces at Support, S&P 500 Turns Sharply Lower

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL TECHNICAL ANALYSIS– Prices are testing support at 94.47, the 38.2% Fibonacci retracement, with a break below that targeting the 50% level at 93.49. Near-term resistance is at 95.69, the 23.6% Fib. A reversal back above that eyes a falling trend line barrier at 97.54.

Forex_US_Dollar_Bounces_at_Support_SP_500_Turns_Sharply_Lower_body_Picture_8.png, US Dollar Bounces at Support, S&P 500 Turns Sharply Lower

Daily Chart - Created Using FXCM Marketscope 2.0

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--- 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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