THE TAKEAWAY – The US Dollar is treading water near familiar technical levels as financial markets drift sideways in thin holiday trade. Gold is nearing key support.
S&P 500 – Prices continue to flirt with horizontal support-turned-resistance at 1265.30 having taken out falling trend line resistance set from the October 27 swing high. A break higher exposes 1295.10. A dip back below the trend line (now acting as minor support) opens the door for a move to 1224.40 as the first significant downside barrier.
Daily Chart - Created Using FXCM Marketscope 2.0
CRUDE OIL – Prices are testing the top of a falling channel set from the November 17 high, now at the 100.00 figure, with a break higher targeting 101.18. Near-term support remains at 97.89. A candle in Star position hints preliminary signs of a bearish reversal may be emerging but confirmation is needed before anything can be said with confidence.
Daily Chart - Created Using FXCM Marketscope 2.0
GOLD – Prices are drifting lower after putting in a bearish Shooting Star candlestick below support-turned-resistance at the bottom of a falling channel set from early November. The bears now aim to challenge long-term support at a trend line dating back to late October 2008, now at 1570.70. Channel resistance is now at 1613.24.
Daily Chart - Created Using FXCM Marketscope 2.0
US DOLLAR – Prices are treading water below resistance at 9982, the 14.6% Fibonacci retracement level. Support remains at 9925, the 23.6% Fib, and finds reinforcement in a rising trend line set from early November. A breakdown exposes 9823 while a push above immediate resistance targets the year-to-date closing high at 10081.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
