Forex Analysis: US Dollar Reverses Higher as S&P 500 Tests Support

THE TAKEAWAY: The US Dollar has mounted a formidable reversal while S&P 500 technical positioning hints at weakness, hinting the greenback may see upward follow-through.

US DOLLAR TECHNICAL ANALYSIS– Prices are testing above resistance at 9995, the 23.6% Fibonacci expansion, after completing a bullish Flag pattern. A confirmed break higher exposes the 32.8% Fib at 10044. Trend line resistance-turned-support is at 9961.

Forex_Analysis_US_Dollar_Reverses_Higher_as_SP_500_Tests_Support_body_Picture_4.png, Forex Analysis: US Dollar Reverses Higher as S&P 500 Tests Support

Daily Chart - Created Using FXCM Marketscope 2.0

S&P 500 TECHNICAL ANALYSIS – Prices put in a bearish Dark Cloud Cover candlestick below falling trend line resistance set from the September 14 high (1444.40), hinting a move lower is ahead. Negative RSI divergence reinforces the case for a downside scenario. Sellers are now testing through initial rising channel support at 1423.50, with a confirmed break downward on a daily closing basis exposing the 38.2% Fibonacci retracement at 1408.80. Alternatively, a reversal above the trend line aims for the channel top at 1455.90.

Forex_Analysis_US_Dollar_Reverses_Higher_as_SP_500_Tests_Support_body_Picture_3.png, Forex Analysis: US Dollar Reverses Higher as S&P 500 Tests Support

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS – Prices are testing the 100% Fibonacci expansion at 1630.97, a barrier reinforced by the bottom of a falling channel carved out since mid-September. A further drop below this boundary aims for the 123.6% Fib at 1601.78. The 76.4% expansion at 1659.90 lines up as near-term resistance, with a move above that targeting the 61.8% mark at 1677.84.

Forex_Analysis_US_Dollar_Reverses_Higher_as_SP_500_Tests_Support_body_Picture_2.png, Forex Analysis: US Dollar Reverses Higher as S&P 500 Tests Support

Daily Chart - Created Using FXCM Marketscope 2.0

Want to learn more about RSI? Watch this Video.

CRUDE OIL TECHNICAL ANALYSIS– Prices put in a bearish Evening Star candlestick pattern below resistance at the top of what may prove to be a bearish Flag chart pattern (90.47). A daily close below the setup’s bottom at 86.10 would act as confirmation, initially exposing 81.63 as the next downside objective. Alternatively, a reversal above 90.47 targets trend line resistance at 93.92.

Forex_Analysis_US_Dollar_Reverses_Higher_as_SP_500_Tests_Support_body_Picture_1.png, Forex Analysis: US Dollar Reverses Higher as S&P 500 Tests Support

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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