Technicals | Sep 29 2011
US Dollar Chart Setup Hints Pullback Complete, Rally Ready To Resume
By Ilya Spivak, Currency Strategist
THE TAKEAWAY – US Dollar technical positioning suggests the safe-haven currency is ready to resume the upswing initiated in late August after completing a brief downward correction.
S&P 500 – Prices put in a bearish Shooting Star candlestick below the 1200.00 figure and dropped to support at 1152.55, the 23.6% Fibonacci extension level. Continued selling from here targets the 50% Fib at 1139.25. Near-term resistance remains at 1200.00.
CRUDE OIL – Prices reversed lower from resistance at $84.16, the 23.6% Fibonacci extension level, to form a Bearish Engulfing candlestick pattern and break back below the 38.2% level $80.97. The bears now aim to challenge the 50% Fib at $78.03.
GOLD – Prices broke back below support at $1624.09, the 23.6%Fibonacci retracement level, to challenge the minor 14.6% boundary at 1589.14. A break below the latter level exposes the September 26 low at $1532.45. However, early signs of positive RSI divergence warn that another leg higher may materialize before the larger selloff resumes. The 23.6% Fib as has been recast as resistance.
US DOLLAR – Prices put in a Bullish Engulfing candlestick pattern above 23.6% Fibonacci retracement support at 9868, a level reinforced by the bottom of a rising channel set from the late August swing low, hinting that the pullback that played out over the past three days is over and the rally is ready to resume. Near-term resistance stands at 9947, shortly followed by the 10,000 figure.
The views expressed are not FNArena's (see our disclaimer).
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