Dollar Perched at Trend Support, SPX 500 Trying to Recover

Talking Points:

• US Dollar Waiting for Direction at Trend Support
• S&P 500 Attempting Build on a Nascent Recovery
• Gold Flat-lined, Crude Oil Eyeing January High

Can’t access to the Dow Jones FXCM US Dollar Index? Try the USD basket on Mirror Trader. **

US DOLLAR TECHNICAL ANALYSIS – Prices continue to hover above support at the bottom of a rising channel that has guided the trend higher since late November 2013. This barrier is bolstered by the 23.6% Fibonacci retracement (10661). A break lower from here on a daily closing basis initially exposes the 38.2% level at 10602. Near-term resistance is at 10718, a now-familiar horizontal pivot level, with a reversal above that aiming for the January 21 high at 10756.

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.

S&P 500 TECHNICAL ANALYSIS – Prices are moving to test resistance at 1781.30, the intersection of a rising trend line set from November 2012 and the 38.2% Fibonacci retracement. A break above this barrier exposes the 50% level at 1794.70. Alternatively, a reversal below the 23.6% Fib at 1764.70 targets a trend line established from February 2013 (now at 1743.90).

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS – Prices put in a Bearish Engulfing candlestick pattern at 1267.71, a support-turned-resistance level set from early October, hinting at weakness ahead. Breaking below support in the 1235.57-45.94 area, marked by the 23.6% Fibonacci expansion and a rising trend line, exposes the 38.2% level at 1208.88. Alternatively, a reversal above 1267.71 targets the January 27 high at 1279.10.

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL TECHNICAL ANALYSIS – Prices edged lower as expected after putting in a bearish Dark Cloud Cover candlestick pattern but the selloff was quickly cut off at 96.31, the 23.6% Fibonacci expansion. Near-term resistance at 98.56, the January 30 high, followed by the underside of a a rising trend line set from mid-January (now at 99.00). Alternatively, a break below support targets the 38.2% level at 94.92.

Daily Chart - Created Using FXCM Marketscope 2.0

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

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