Forex Analysis: US Dollar Hovers at Support as S&P 500 Crumbles

THE TAKEAWAY: The US Dollar managed to hold near support, reversing earlier losses, as the S&P 500 turned sharply lower to boost demand for the go-to haven currency.

US DOLLAR TECHNICAL ANALYSIS– Prices continue to flirt with 9963, the 38.2% Fibonacci retracement. A move lower from here aims to target 9864-79 area, marked by a rising channel bottom set from mid-September and a falling channel top established from the June 1 high. Resistance is at 10002, with a break above that aiming for the 50% Fib at 10032.

Forex_Analysis_US_Dollar_Hovers_at_Support_as_SP_500_Crumbles_body_Picture_5.png, Forex Analysis: US Dollar Hovers at Support as S&P 500 Crumbles

Daily Chart - Created Using FXCM Marketscope 2.0

S&P 500 TECHNICAL ANALYSIS – Prices turned sharply lower from support-turned-resistance in the 1424.90-30.90 area to test the 38.2% Fibonacci retracement at 1394.30 once again. A drop below that targets the 50% Fib at 1369.40. Alternatively, a reversal above 1430.90 aims to challenge the underside of a rising channel set from the June 4 swing low (now at 1452.50).

Forex_Analysis_US_Dollar_Hovers_at_Support_as_SP_500_Crumbles_body_Picture_6.png, Forex Analysis: US Dollar Hovers at Support as S&P 500 Crumbles

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS – Prices bounced from support at a rising trend line set from late June to reclaim a foothold above the 1700/oz figure and challenge the 23.6% retracement at 1732.33. A Spinning Top candle below this boundary points to indecision and hints a move lower may be ahead. Near-term support is at 1693.06, the 38.2% Fib. A break below that and the trend line (1680.57) exposes the 50% level at 1661.32. Alternatively, a push above 1732.33 targets the 1790.55-1802.80 area.

Forex_Analysis_US_Dollar_Hovers_at_Support_as_SP_500_Crumbles_body_Picture_7.png, Forex Analysis: US Dollar Hovers at Support as S&P 500 Crumbles

Daily Chart - Created Using FXCM Marketscope 2.0

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CRUDE OIL TECHNICAL ANALYSIS– Prices failed to hold up after poking above the 38.2%Fibonacci expansion at 87.66, revering lower to challenge the 50% expansion at 83.76 once again. A break below that exposes 80.00 figure and the 61.8% level at 7978. Alternatively, a push back above the 87.66 aims for falling trend line resistance at 91.00

Forex_Analysis_US_Dollar_Hovers_at_Support_as_SP_500_Crumbles_body_Picture_8.png, Forex Analysis: US Dollar Hovers at Support as S&P 500 Crumbles

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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