Forex Analysis: US Dollar Holds Support Even as S&P 500 Rallies

THE TAKEAWAY: The US Dollar has shown impressive resilience, holding above key support despite an S&P 500 rally that might have been expected to sink the haven currency.

US DOLLAR TECHNICAL ANALYSIS– Prices are stalling at the bottom of a rising channel set from mid-September (now at 9961). A break below this boundary initially exposes the 38.2% level at 9945. Near-term resistance lines up at 9993, the 23.6% Fibonacci retracement, with a push above that aiming to challenge the November 16 high at 10071.

Forex_Analysis_US_Dollar_Holds_Support_Even_as_SP_500_Rallies_body_Picture_4.png, Forex Analysis: US Dollar Holds Support Even as S&P 500 Rallies

Daily Chart - Created Using FXCM Marketscope 2.0

S&P 500 TECHNICAL ANALYSIS – Prices edged above resistance at a falling trend line set from mid-October and overcame the 50% Fibonacci retracement at 1408.50. The bulls now aim to challenge the 1424.90-30.90 area. The 1408.50 level has been recast as near-term support, with a drop back below that exposing the trend line (now at 1400.04) and the 38.2% retracementat 1392.80.

Forex_Analysis_US_Dollar_Holds_Support_Even_as_SP_500_Rallies_body_Picture_3.png, Forex Analysis: US Dollar Holds Support Even as S&P 500 Rallies

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS – Prices turned lower after putting in a Bearish Engulfing candlestick pattern below the 61.8% Fibonacci retracement (1748.70), dropping to test the 38.2% level at 1719.60. A further push downward below that exposes the 23.6% Fib at 1701.60, a barrier reinforced by a rising trend line set from late June (now at 1698.66). Near-term resistance lines up at 1734.15, the 50% retracement.

Forex_Analysis_US_Dollar_Holds_Support_Even_as_SP_500_Rallies_body_Picture_2.png, Forex Analysis: US Dollar Holds Support Even as S&P 500 Rallies

Daily Chart - Created Using FXCM Marketscope 2.0

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CRUDE OIL TECHNICAL ANALYSIS– Prices bounced to retest rising trend line support-turned-resistance set from mid-October, now at 88.38, with a break above this level exposing the 23.6% Fibonacci expansion at 89.48.Near-term support is at 84.104, the November 7 low, with a break below that exposing the 80-50-81.43 area.

Forex_Analysis_US_Dollar_Holds_Support_Even_as_SP_500_Rallies_body_Picture_1.png, Forex Analysis: US Dollar Holds Support Even as S&P 500 Rallies

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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