THE TAKEAWAY: The US Dollar looks likely to weaken further after prices broke below the first layer of key technical support. The SP 500 continues to look for traction.
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US DOLLAR TECHNICAL ANALYSIS– Prices moved lower as expected, with prices taking out support at the 23.6% Fibonacci retracement (10764) after completing a Bearish Engulfing candlestick pattern. Sellers now aim to challenge the 38.2% level at 10694, with a move beneath that exposing the 50% Fib at 10638. Alternatively, a move back above 10764 eyes the rising channel support-turned-resistance at 10799.
Daily Chart – Created Using FXCM Marketscope 2.0
SP 500 TECHNICAL ANALYSIS – Prices are treading water above support at 1637.00, the 14.6% Fibonacci retracement. A break below that initially targets the 23.6% Fib at 1605.90. Near-term resistance is at the May 22 high (1687.40), a barrier reinforced by the underside of a broken rising trend line set from mid-April (now at 1683.80).
Daily Chart – Created Using FXCM Marketscope 2.0
GOLD TECHNICAL ANALYSIS – Prices moved higher as expected after completing a Bullish Engulfing candlestick pattern, taking out the 38.2% Fibonacci expansion at 1401.63. Buyers now stand to challenge the 50% mark at 1421.26, with a push above that eyeing the 61.8% Fib at 1440.90. The 1401.63 mark has been recast as near-term support.
Daily Chart – Created Using FXCM Marketscope 2.0
CRUDE OIL TECHNICAL ANALYSIS– Prices appear to be forming a Head and Shoulders top chart formation. Confirmation requires a close below the pattern’s neckline (now at 92.78), initially exposing the May 1 low at 90.09 and a measured downside objective at 88.58. Near-term resistance is at 95.89, the May 28 high, with a push beyond that eyeing a falling trend line at 96.82.
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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