Gold Recovery Unravels, SPX 500 Topping Setup Remains in Play

Talking Points:

  • US Dollar Attempting to Rebuild Upward Momentum
  • SP 500 Topping Setup Intact for Now After Bounce
  • Gold Prices Reverse Sharply Downward as Expected

Can’t access the Dow Jones FXCM US Dollar Index? Try the USD basket on Mirror Trader. **

US DOLLAR TECHNICAL ANALYSIS – Prices are attempting to build higher as expected after putting in a Bullish Engulfing candle pattern at support set from October 2013. The bulls are trying to reclaim momentum following a corrective pullback to resistance-turned-support marked by the top of a falling channel set from early June. Near-term resistance is at 10431, the 38.2% Fibonacci retracement, with a break above that on a daily closing basis exposing the 50% level at 10452. Alternatively, a move below triple bottom support in the 10354-75 area targets a multi-year horizontal pivot in play since August 2010 at 10306.

Gold Recovery Unravels, SPX 500 Topping Setup Remains in Play

Daily Chart – Created Using FXCM Marketscope 2.0

** The Dow Jones FXCM US Dollar Index and the Mirror Trader USD basket are not the same product.

SP 500 TECHNICAL ANALYSISPrices are edging lower as expected after putting in a bearish Evening Star candlestick pattern at the top of a rising channel set from mid-April. A break below the 14.6% Fibonacci retracement at 1960.10 on a daily closing basis exposes 1944.20-46.80 area, marked by the channel floor and the 23.6% level. Near-term resistance is at 1985.90, the July 3 high, followed by the underside of a previously broken trend line at 1993.00.

Gold Recovery Unravels, SPX 500 Topping Setup Remains in Play

Daily Chart – Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS – Prices turned lower anew as expected. Sellers are testing support at 1305.03, the 38.2% Fibonacci retracement, with a break below that on a daily closing basis exposing the 50% level at 1292.66. Alternatively, a reversal above the 23.6% Fib at 1320.34 targets rising trend line support-turned-resistance at 1327.40.

Gold Recovery Unravels, SPX 500 Topping Setup Remains in Play

Daily Chart – Created Using FXCM Marketscope 2.0

CRUDE OIL TECHNICAL ANALYSIS – Prices renewed their push downward, breaking below the 38.2% Fibonacci retracement at 101.36. Sellers now aim to challenge the $100.00 figure, followed by the 50% level at 99.42. A push below the latter level opens the way for a test of the 61.8% Fib at 97.49. Alternatively, a turn back above 101.36 eyes the 23.6% retracement at 103.76.

Gold Recovery Unravels, SPX 500 Topping Setup Remains in Play

Daily Chart – Created Using FXCM Marketscope 2.0

— Written by Ilya Spivak, Currency Strategist for DailyFX.com

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