THE TAKEAWAY: The US Dollar technical positioning warns that prices are vulnerable to a downward reversal after touching the highest level in nearly three years last week.
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US DOLLAR TECHNICAL ANALYSIS– Prices put in a Dark Cloud Cover candlestick pattern, hinting a move lower may be ahead. Negative RSI divergence reinforces the case for a downside scenario. Initial support is at 10763, the 23.6% Fibonacci retracement, with a break below that targeting the 38.2% level at 10694. Near-term resistance is at 10876, the May 23 high.
Daily Chart – Created Using FXCM Marketscope 2.0
SP 500 TECHNICAL ANALYSIS – Prices are testing support in the 1649.60-51.60 area, marked by the 23.6% Fibonacci retracement and the 100% expansion. A break below this barrier initially exposes the 38.2% retracement at 1629.40. Near-term resistance is at 1676.50, the 123.6% expansion, with a reversal above that eyeing the 138.2% mark at 1693.10.
Daily Chart – Created Using FXCM Marketscope 2.0
GOLD TECHNICAL ANALYSIS – Prices completed a Bullish Engulfing candlestick pattern above support at 1348.97, the 38.2% Fibonacci retracement level, hinting at gains ahead. Initial resistance is at 1402.11, the 23.6% level, with a break above that targeting the 14.6% Fib at 1434.86 and the May 3 high at 1488.00. Alternatively, a move below support eyes the 50% expansion at 1306.02.
Daily Chart – Created Using FXCM Marketscope 2.0
CRUDE OIL TECHNICAL ANALYSIS– Prices moved lower as expected after putting in a bearish Dark Cloud Cover candlestick pattern. Sellers are now testing below a horizontal support shelf at 93.84, with a break below that exposing swing lows in the 92.11-19 area. Near-term resistance is at 96.87, marked by a falling trend line set from mid-September 2012.
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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