Forex Analysis: Dollar Slips Past Support, S&P 500 Still Aiming Lower

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SymbolPriceChange
^USDOLLAR12,339.45+21.13

THE TAKEAWAY: The US Dollar slipped below key trend line support but S&P 500 positioning continues to favor losses, hinting the greenback may yet find a near-term lifeline.

US DOLLAR TECHNICAL ANALYSIS Prices broke rising trend line support set from the mid-September bottom, exposing a neckline barrier at 9925. A further drop below that exposes the bottom of a Flag formation at 9881. Near-term resistance is at 9963, the Flag top, with a break above that aiming for the 23.6% Fibonacci expansion at 9995.

Forex_Analysis_Dollar_Slips_Past_Support_SP_500_Still_Aiming_Lower_body_Picture_4.png, Forex Analysis: Dollar Slips Past Support, S&P 500 Still Aiming Lower

Daily Chart - Created Using FXCM Marketscope 2.0

S&P 500 TECHNICAL ANALYSIS – Prices put in a bearish Three Inside Down candlestick pattern at resistance marked by a falling trend line set from the mid-September swing high (now at 1439.40), hinting a move lower is ahead. The appearance of what looks to be a bearish continuation Flag chart formation reinforces the case for a downside scenario. A break below the Flag bottom at 1413.80 confirms the setup, initially exposing 1396.40. Alternatively, a push above 1439.40 targets the next upside hurdle at 1466.10.

Forex_Analysis_Dollar_Slips_Past_Support_SP_500_Still_Aiming_Lower_body_Picture_3.png, Forex Analysis: Dollar Slips Past Support, S&P 500 Still Aiming Lower

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS Prices broke lower after putting in a Bearish Engulfing candlestick pattern, taking out support at a rising trend line set from late June. A move lower is now materializing as expected following a Hanging Man candle completed on a retest of this barrier. Near-term support is at 1692.41, the 50% Fibonacci expansion. A break below that exposes the 61.8% level at 1677.84. Trend line support-turned-resistance is at 1720.45, with a break above that broadly targeting 1752.55 anew.

Forex_Analysis_Dollar_Slips_Past_Support_SP_500_Still_Aiming_Lower_body_Picture_2.png, Forex Analysis: Dollar Slips Past Support, S&P 500 Still Aiming Lower

Daily Chart - Created Using FXCM Marketscope 2.0

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CRUDE OIL TECHNICAL ANALYSIS Prices moved lower as expected after putting in a Shooting Star candlestick. A bearish continuation Flag chart pattern now appears to be validated with a break through the setup’s lower boundary. Near-term support is at 85.61, the 50% Fibonacci expansion. A break below that exposes the 61.8% Fib at 84.50. Alternatively, a push back above the Flag bottom (87.16) aims for 89.19

Forex_Analysis_Dollar_Slips_Past_Support_SP_500_Still_Aiming_Lower_body_Picture_1.png, Forex Analysis: Dollar Slips Past Support, S&P 500 Still Aiming Lower

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

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
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