THE TAKEAWAY: The US Dollar advanced for a second consecutive day to yield its best run higher in two weeks but the move is yet to overturn last week’s bearish breakout.
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US DOLLAR TECHNICAL ANALYSIS – Prices advanced as expected after putting in a Bullish Engulfing candlestick pattern. A break above initial resistance is at 10735, the 23.6% Fibonacci retracement, has exposed the 10779-87 area, marked by the underside of a rising trend line set from mid-June and the 38.2% level. A push beyond that aims for the 50% level at 10830. Alternatively, a move back below 10735 eyes the August 8 lowat 10650.
Daily Chart – Created Using FXCM Marketscope 2.0
** The Dow Jones FXCM US Dollar Index and the Mirror Trader USD basket are not the same product.
SP 500 TECHNICAL ANALYSIS – Prices pulled back as expected after putting in a Hanging Man candlestick. Sellers are now testing support is at 1687.40, the May 22 high, with a break downward targeting the 23.6% Fibonacci retracement at 1674.10. Near-term support-turned-resistance is at the recently broken bottom of a rising channel set from mid-July, now at 1697.40. A move above that exposes the August 8 high at 1709.60.
Daily Chart – Created Using FXCM Marketscope 2.0
GOLD TECHNICAL ANALYSIS – Prices broke resistance at a falling trend line set from early May, exposing the 38.2% Fibonacci expansion at 1336.76. A break above that targets the 50% level at 1356.52. Near-term support is at 1312.32, the 23.6% level, with a reversal back beneath that eying the August 7 low at 1272.81.
Daily Chart – Created Using FXCM Marketscope 2.0
CRUDE OIL TECHNICAL ANALYSIS– Prices have been edging lower within the bounds of what may be a Flag chart pattern, a setup indicative of counter-trend correction preceding resumption of the longer-term advance. A push above near-term resistance at 106.04, the 23.6% Fibonacci expansion, has exposed the Flag top at 106.92. A push beyond that targets the 38.2% level at 108.40. Alternatively, a move back below 106.04 aims for the August 8 low at 102.21, followed by the Flag bottom at 101.61.
Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for Dailyfx.com
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