THE TAKEAWAY: Recoveries in the US Dollar and the SP 500 proved short-lived as expected, with prices reversing lower after testing the first layer of chart resistance.
Capitalize on Shifts in Market Mood with the DailyFX Speculative Sentiment Index.
US DOLLAR TECHNICAL ANALYSIS – Prices moved lower as expected after putting in a Bearish Engulfing candlestick pattern. A mild recovery faltered at resistance marked by the 38.2% Fibonacci retracement at 10655. Sellers now challenge a key support cluster in the 10510-576 area, marked by a longer-term 38.2% Fib, the March 8 high, and a rising trend line set from mid-December 2012. A drop beneath that initially aims for the 50% level at 10397.
Daily Chart – Created Using FXCM Marketscope 2.0
SP 500 TECHNICAL ANALYSIS – A rebound from support marked by the 23.6% Fibonacci retracement (1605.90) and a rising trend line set from mid-November 2012 was cut short at the top of a falling channel set from late May. Renewed selling pressure that takes prices below 1605.90 from here initially exposes the channel bottom at 1588.90. Alternatively, a move above the channel top (now at 1638.90) aims for minor 38.2% Fib resistance at 1655.40.
Daily Chart – Created Using FXCM Marketscope 2.0
GOLD TECHNICAL ANALYSIS – Prices moved lower as expected, taking out rising channel to challenge an upward-sloping trend line set from the April 16 low (now at 1370.41). This barrier is reinforced by the 38.2% Fibonacci expansion at 1366.43, with a push through it eyeing the 50% level at 1348.74. Channel support-turned-resistance is at 1405.77, followed by the 50% Fib expansion at 1413.03.
Daily Chart – Created Using FXCM Marketscope 2.0
CRUDE OIL TECHNICAL ANALYSIS – Prices dropped back below the 38.2% Fibonacci expansion at 95.71, exposing the 23.6% level at 94.00 anew. Continued selling beyond that targets the June 3 low at 91.23, with a close below that on a daily basis overturning the bullish implications of a Piercing Line candlestick pattern. Alternatively, a move back above 95.71 aims for the 96.63-97.09 area, marked by a falling trend line and the 50% expansion.
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
To be added to Ilya’s e-mail distribution list, please CLICK HERE
New to FX? Watch this Video. For live market updates, visit the Real Time News Feed