Forex Analysis: US Dollar Turns Lower as S&P 500 Soars

THE TAKEAWAY: The US Dollar pulled back as expected while the S&P 500 shot aggressively higher in the wake of a deal to avert the fiscal cliff.

US DOLLAR TECHNICAL ANALYSIS– Prices turned downward as expected after putting in a Shooting Star candlestick below resistance at 10044, the 32.8%Fibonacci expansion. Initial support lines up at 9995, the 23.6% expansion, with a break below that aiming for a rising trend line at 9932. Alternatively, a reversal above resistance targets the underside of a formerly supporting trend line at 10059 and the 50% level at 10082.

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Daily Chart - Created Using FXCM Marketscope 2.0

S&P 500 TECHNICAL ANALYSIS – Prices launched sharply higher in the aftermath of a deal to avert the fiscal cliff to test above resistance at a falling trend line set from mid-September. Initial resistance is at 1450.10, the December 19 high. A break above that targets the October 18 high at 1464.40. Initial support is at 1432.90.

Forex_Analysis_US_Dollar_Turns_Lower_as_SP_500_Soars_body_Picture_3.png, Forex Analysis: US Dollar Turns Lower as S&P 500 Soars

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS – Prices are testing through resistance at 1680.80, the 38.2% Fibonacci retracement, with a break above that exposing the 50% level at 1694.82. Near-term support is at 1663.46, the 23.6% retracement.

Forex_Analysis_US_Dollar_Turns_Lower_as_SP_500_Soars_body_Picture_2.png, Forex Analysis: US Dollar Turns Lower as S&P 500 Soars

Daily Chart - Created Using FXCM Marketscope 2.0

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CRUDE OIL TECHNICAL ANALYSIS– Prices are pushing aggressively higher, testing through rising channel top resistance to target the 100% Fibonacci expansion at 93.25. A break above that aims for the 123.6% level at 94.51. Near-term support is in the 91.54-92.01 area, marked by the 76.4% Fib and the channel top.

Forex_Analysis_US_Dollar_Turns_Lower_as_SP_500_Soars_body_Picture_1.png, Forex Analysis: US Dollar Turns Lower as S&P 500 Soars

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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