S&P 500, US Dollar Produce Mirror-Image Reversal Chart Patterns
THE TAKEAWAY: The S&P 500 and the US Dollar have formed mirror-image reversal chart patterns warning of a pick-up in risk appetite and weakness in the benchmark currency.
S&P 500 - Prices broke above support-turned-resistance at a falling trend line set from mid-April and now appear to be carving out a bullish inverse Head and Shoulders pattern. Confirmation is needed on a break of the formation's neckline in the 1334.40-41.90 area. This would initially expose 1357.40 but broadly imply a measured upside target at 1419.90
Daily Chart - Created Using FXCM Marketscope 2.0
CRUDE OIL - Prices broke higher after putting in a bullish Piercing Line candlestick pattern above support at 81.07, the 23.6% Fibonacci expansion, as expected. The bulls now aim to challenge the June 7 high at the 87.00 figure. The 14.6% Fib at 83.30 has been recast as near-term support.
Daily Chart - Created Using FXCM Marketscope 2.0
GOLD - Prices broke above major resistance at a falling trend line set from early March. Buyers now aim to challenge the 76.4%Fibonacci retracementat 1637.35, with a break higher targeting the May 1 high at 1671.49. The 61.8% Fib at 1616.23 has been recast as near-term support.
Daily Chart - Created Using FXCM Marketscope 2.0
US DOLLAR - Prices are probing through support in the 10129-43 area, which also looks like the would-be neckline of a Head and Shoulders top formation. A break lower confirms the setup, initially exposing the 10066-70 region and implying an overall measured downside target at 9945. Near-term resistance lines up at 10220, the 61.8% Fibonacci expansion, with a breach higher targeting the 76.4% boundary at 10316.
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
To be added to Ilya's e-mail distribution list, send a note with subject line "Distribution List" to ispivak@dailyfx.com
S&P 500 - Prices broke above support-turned-resistance at a falling trend line set from mid-April and now appear to be carving out a bullish inverse Head and Shoulders pattern. Confirmation is needed on a break of the formation's neckline in the 1334.40-41.90 area. This would initially expose 1357.40 but broadly imply a measured upside target at 1419.90
Daily Chart - Created Using FXCM Marketscope 2.0
CRUDE OIL - Prices broke higher after putting in a bullish Piercing Line candlestick pattern above support at 81.07, the 23.6% Fibonacci expansion, as expected. The bulls now aim to challenge the June 7 high at the 87.00 figure. The 14.6% Fib at 83.30 has been recast as near-term support.
Daily Chart - Created Using FXCM Marketscope 2.0
GOLD - Prices broke above major resistance at a falling trend line set from early March. Buyers now aim to challenge the 76.4%Fibonacci retracementat 1637.35, with a break higher targeting the May 1 high at 1671.49. The 61.8% Fib at 1616.23 has been recast as near-term support.
Daily Chart - Created Using FXCM Marketscope 2.0
US DOLLAR - Prices are probing through support in the 10129-43 area, which also looks like the would-be neckline of a Head and Shoulders top formation. A break lower confirms the setup, initially exposing the 10066-70 region and implying an overall measured downside target at 9945. Near-term resistance lines up at 10220, the 61.8% Fibonacci expansion, with a breach higher targeting the 76.4% boundary at 10316.
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
To be added to Ilya's e-mail distribution list, send a note with subject line "Distribution List" to ispivak@dailyfx.com
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