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US Dollar Pullback Hinted as S&P 500 Continues to Correct Higher
Written by article default Thursday, 15 September 2011 08:27
THE TAKEAWAY – US Dollar technical positioning hints a pullback may materialize as the S&P 500 sees more room to correct higher without negating the larger bearish bias.
S&P 500 – Prices continue to consolidate in a Flag chart pattern, broadly pointing to downward continuation. The resumption of overtly bearish momentum requires a break below the Flag formation bottom, now at 1131.07. Near-term, resistance stands at 1204.40 while support lines up at 1176.40.
CRUDE OIL – Unchanged from yesterday: “Positioning closely mirrors that of the S&P 500, with prices testing the top of a Flag chart formation reinforced by the upper boundary of a rising channel set from early May. Here too, the setup is hinting at bearish continuation pattern, with initial support lining up at the 23.6% Fibonacci extension level ($83.12).” The formation of a Bearish Engulfing candlestick pattern reinforces the case for a downside scenario.
GOLD – Unchanged from yesterday: “A pair of Bearish Engulfing candlesticks may be marking a double top below the $1900 figure, with confirmation seen on a break of an upward-sloping neckline established since early August. Negative RSI divergence bolsters the case for a downside scenario.” A break lower from hereaims at a measured target near $1636.87, though a confirmed close below trend line support is needed to calculate an implied target more precisely.
US DOLLAR – Prices continue to test range resistance at 9756, a triple top in place since mid-May. Three back-to-back Inverted Hammer candlesticks point to a loss of bullish conviction and hint a pullback is ahead. If a near-term reversal lower is to materialize, initial support lines up at 9699 and 9646. Alternatively, renewed bullish momentum that produces a daily close above 9756 exposes 9887.
Created Using FXCM Marketscope 2.0
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