US Dollar Probing Above Resistance as S&P 500 Drifts Lower

DailyFX   |  March 22 2012 12:23 EDT

The US Dollar is probing above initial resistance having signaled the end of the recent downswing yesterday, hinting the up move maybe gaining momentum.

THE TAKEAWAY: The US Dollar is probing above initial resistance having signaled the end of the recent downswing yesterday, hinting the up move maybe gaining momentum.

S&P 500 – Prices edged lower after putting in a Hanging Man candlestick below resistance at the top of a Rising Wedge chart formation being carved out since November, hinting a move lower may gaining momentum. Initial support lines up at 1392.50, the Wedge “midline”, followed by the 23.6% Fibonacci expansion at 1382.60. Near-term resistance is in the 1408.80-1418.20area, marked by the 38.2% expansion and the Wedge top.

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL – Prices staged a mild recovery from resistance-turned-support at the top of a recently broken Falling Wedge top having put in a Bearish Engulfing candlestick pattern. It remains unclear at this point whether that selloff marked a true downward reversal or merely a correction. A break of the next layer of support at 104.75 marked by the 38.2% Fibonacci retracement would confirm the bearish scenario. Initial resistance lines up at 108.32, the 14.6% Fib.

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD – Unchanged from yesterday: “Prices continue to carve out a Falling Wedge bullish reversal chart formation, with a Harami candlestick pattern above support at 1638.84 reinforcing the likelihood of a bounce. Initial resistance lines up in the 1666.37-1677.05 area, with a break above that validating the Wedge setup and exposing resistance barriers at the 1700/oz figure as well as 1718.05.”

Daily Chart - Created Using FXCM Marketscope 2.0

US DOLLAR – Prices are testing above initial support at 9997 marked by the 23.6% Fibonacci retracement having put in a Bullish Engulfing candlestick pattern above resistance-turned-support at a falling trend line set from the December 14 swing high. A daily close above this boundary exposes the 61.8% Fib expansion at 10071. Near-term support remains at 9935 at the 38.2% retracement for now.

Daily Chart - Created Using FXCM Marketscope 2.0

--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com

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