Technical Analysis

THE TAKEAWAY: The US Dollar has stalled at technical support while the S&P 500 is attempting to build downward momentum after showing a bearish reversal signal.

US DOLLAR TECHNICAL ANALYSIS – Prices are testing support in the 10790-803 area, marked by the 38.2% Fibonacci retracement and the June 24 swing high, with a break below that eyeing the 50% level at 10739. Near-term resistance is at 10882, the 23.6% level.



S&P 500 TECHNICAL ANALYSIS – Prices put in a bearish Dark Cloud Cover candlestick pattern below resistance at 1687.40, the May 22 swing high, hinting a move lower is ahead. Confirmation of reversal requires a daily close below rising trend line support set from late June, now at 1678.30. In this scenario, the next level of support lines up at 1655.40, the 23.6% Fibonacci retracement. Alternatively, a break above 1687.40 exposes the 100% Fib expansion at 1710.90.



GOLD TECHNICAL ANALYSIS – Prices put in a Bearish Engulfing candlestick pattern below resistance at 1297.75, the 38.2% Fibonacci retracement, hinting a move lower is ahead. Near-term rising channel support is at 1260.04, a barrier reinforced by the 23.6% retracement at 1252.80. A break below that aims for Fib expansion support at 1228.00. Alternatively, a move above resistance sees the next upside boundary at 1334.08.



CRUDE OIL TECHNICAL ANALYSIS – Prices put in a bearish Dark Cloud Cover candlestick pattern, hinting a move lower is ahead. Near-term support is at 103.93, the 23.6% Fibonacci retracement, with a break beneath that targeting the 38.2% level at 101.78. The bearish candle setup would be invalidated on a close above 107.41, the July 11 high.



--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com

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4Hour



FOREXAnalysis: No change – “Expectations are for a rally in order to correct the 5 wave decline from the April high. The former 4th wave extreme near .8150 is a level to keep in mind as resistance. Near term support at .7750 held and recent divergences with AUDUSD are suggestive of a turn higher.”

Watch for support now at .7805.

FOREXTrading Strategy: Flat
LEVELS: .7749 .7805 .7840 .7968 .8030 .8136


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THE TAKEAWAY: An attempted US Dollar recovery failed to overcome chart resistance while evidence of a forthcoming S&P 500 reversal lower continues to build.

US DOLLAR TECHNICAL ANALYSIS – Prices are testing falling trend line resistance set from the July 8 high (now at 10860), with a break above that targeting the 23.6% Fibonacci retracement at 10882. Near-term support is in the 10790-803 area, marked by the 38.2% level and the June 24 high. A move beneath that initially eyes the 50% Fib at 10739.



S&P 500 TECHNICAL ANALYSIS – Prices put in a bearish Dark Cloud Cover candlestick pattern below resistance at 1687.40, the May 22 swing high, hinting a move lower is ahead. Negative RSI divergence bolsters the case for a downside scenario. Confirmation of a reversal requires a daily close below rising trend line support set from late June, now at 1684.40. In this scenario, the next level of support lines up at 1661.50, the 23.6% Fibonacci retracement. Alternatively, a break above 1687.40 exposes the 100% Fib expansion at 1710.90.



GOLD TECHNICAL ANALYSIS – Prices put in a Bearish Engulfing candlestick pattern below resistance at 1297.75, the 38.2% Fibonacci retracement, hinting a move lower is ahead. Near-term rising channel support is at 1265.34, with a break below that eyeing the 23.6% level at 1252.80. Alternatively, a move above resistance sees the next upside boundary at 1334.08, the 50% Fib.



CRUDE OIL TECHNICAL ANALYSIS– Prices pushed above resistance at 107.77, the 23.6% Fibonacci expansion, exposing the 38.2% level at 109.92. Negative RSI divergence warns of ebbing bullish momentum however and hints a reversal lower may be around the corner. A move back below 107.77 sees initial support at 106.44, the 14.6% Fib.



--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com


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The GBPUSD is at a point where the opportunistic trader might take advantage of a high price. A Nikkei 225 / S&P 500 comparison tells a story that can be played through USDMXN. US Dollar turn.

GBPUSD
Weekly



FOREXAnalysis: Bigger picture GBPUSD bearish logic goes something like this; a 4 year triangle was broken to the downside in February. The market found bottom in March and rallied in 3 waves, eventually failing at the February breakdown level. The rally that commenced last week has already erased half (exactly…1.5281 is also the rolling 13 week midpoint) of the decline from the June top. Don’t forget, the high for the year was made on the first trading day of the year (significant when one considers the distribution of highs and lows within a calendar year). Ultimately, the long term triangle break portends a return to 1.3500 although 1.4225/58 is a level to keep in mind as support.

There are concerns of course, including last week’s reversal. The market confirmed the reversal with follow through this week. There are always 2 sides though and the reversal doesn’t erase the implications from the 4 year triangle break. Looking strictly at price, the current level was huge support in 2011 and 2012. A main tenet of technical analysis is that former support becomes resistance and vice versa. Cable is at former support…it’s reasonable to expect resistance.

FOREX Trading Strategy: Currently short from 1.5190 with 1.5310 stop. That stop might not be safe but such is trading. If stopped out then will be looking for resistance near this short term upward sloping trendline.

GBPUSD
Daily



Nikkei 225 and S&P 500 Futures Contracts (September)
Daily



FOREXAnalysis: In just 4 weeks, the S&P 500 has levitated to record highs. Juxtaposed next to the Nikkei, there is reason to question the excitement…if not turn outright bearish. The new S&P high is not confirmed by Nikkei action. Support becoming resistance and vice versa holds true for trendlines as well. Both markets have traded to the underside of former support lines. It is reasonable to expect resistance here. Market leaders are also flashing warning signs.

FOREX Trading Strategy: Looking to play a stock market reversal through USDMXN. I covered USDJPY at the end of Friday’s DailyFX PLUS webinar.

USDMXN
Daily



FOREXAnalysis: 5/22 is an important day. That is the Nikkei top and it was the S&P top. It was also a large volume day across many markets, including USDMXN. The close of that day is estimated support at 12.42. Near term wave structure suggests one final low before a turn.
FOREX Trading Strategy: Looking for a tradeable low next week.



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THE TAKEAWAY: The US Dollar is retreating from technical resistance while the S&P 500 overturned bearish cues noted last week, advancing to a new record high.

US DOLLAR TECHNICAL ANALYSIS – Prices are pulling back from falling trend line resistance set from the July 8 high (now at 10844) to test support in the 10790-803 area, marked by the 38.2% Fibonacci retracement and the June 24 high. A break downward initially eyes the 50% Fib at 10739. Alternatively, a reversal above the trend line sees the next level of resistance at 10882, the 23.6% level.



S&P 500 TECHNICAL ANALYSIS – Prices broke above resistance at 1687.40, the May 22 swing high, overturning bearish cues noted last week and exposing the 100% Fibonacci expansion at 1710.90. The 1687.40 level has been recast as near-term support, reinforced by a rising trend line set from late June. A reversal back below that eyes the 76.4% level at 1675.10.



GOLD TECHNICAL ANALYSIS – Prices are testing above resistance at 1297.75, the 38.2% Fibonacci retracement, with a break higher targeting the 50% level at 1334.08. Rising channel support is at 1270.50, with a reversal beneath that eyeing the 23.6% level at 1252.80.



CRUDE OIL TECHNICAL ANALYSIS– Prices pushed above resistance at 107.77, the 23.6% Fibonacci expansion, exposing the 38.2% level at 109.92. Negative RSI divergence warns of ebbing bullish momentum however and hints a reversal lower may be around the corner. A move back below 107.77 sees initial support at 106.44, the 14.6% Fib.




--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com

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This publication attempts to further explore the concept that mass movements of human psychology, as represented by the financial markets, are subject to the mathematical laws of nature and through the use of various geometric, arithmetic, statistical and cyclical techniques a better understanding of markets and their corresponding movements can be achieved.

• USD/JPY has continued to find strong resistance near the 7th square root progression of the June low in the 101.60 area
• While over 99.05 our near-term trend bias will remain higher, but a clear break of 101.60 is needed soon to maintain the immediate upside tack in the rate
• Near-term focused cycle studies point to Tuesday and the end of the week as potential minor turn windows
• Immediate support is seen at the 99.65 6th square root progression of the June low
• However, only weakness below 99.05 would undermine the near-term positive tone in the pair and turn us negative

Strategy: Like the long side on a clear break of 101.60.

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
USD/JPY	*99.05	99.65	99.95	100.15	*101.60

GBP/USD:

• GBP/USD pierced the 50% retracement of the June to July decline near 1.5280 on Monday to trade to its highest level in over three weeks
• While over 1.5175 our near-term trend bias will remain higher in Cable
• Gann resistance at 1.5325 looks like a key pivot and a close above this level is required to set up a further push towards a Fibonacci price cluster in the 1.5390 area
• Short-term oriented time cycle studies suggest today and the end of the week are possible minor turn widnows
• More immediate support is seen at 1.5250, but only weakness back under 1.5175 would turn us negative on Cable

Strategy: Like holding reduced long positions while over 1.5175.

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
GBP/USD	*1.5175	1.5250	1.5325	*1.5325	*1.5390

XAU/USD:

• XAU/USD is testing key resistance at the 4th square root progression of the year-to-date low in the 1316 area
• A close above this level is required to set up a more meaningful advance towards 1348 and shift the trend bias to positive
• However, some caution is advised here as the next 48 hours are a well defined cycle turn window in the metal where the broader downtrend could try to re-assert
• The 1283 remains near-term support
• However, weakness below 1248 is needed to signal a broader downside resumption

Strategy: Very wary of a downside resumption over the next two days. Don’t like the long side until after this cycle turn window is surpassed.

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
XAU/USD	*1248	1283	1316	*1316	*1348

Focus Chart of the Day: EUR/USD



The second half of this week looks important from a cyclical perspective for the equity markets with a top of some sort now looking possible during this timeframe. However, the Euro also has some interesting timing over the course of the next few days as several short-term Fibonacci time relationships and longer-term Pi time relationships converge over the next 48 hours. In addition, Thursday marks the anniversary of the 2012 low in EUR/USD. In Gann, anniversary dates of past significant highs and lows are often important cyclical inflection points. Given the low last July was multi-year low that led to aggressive strength over several quarters it qualifies in our book as “significant” and could influence price action later this week. There is also some potentially important timing late next week which we will update on as we approach it.

--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com

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THE TAKEAWAY: The US Dollar has broken beneath chart support, clearing the way for further weakness. The S&P 500 has set its sights on the 1700.00 figure.

US DOLLAR TECHNICAL ANALYSIS – Prices continue to play out a bearish reversal identified two weeks ago, taking out support in the 10790-803 area to expose the 50% Fibonacci retracement at 10739. A further push beneath that targets the 61.8% level at 10675. Alternatively, a reversal back above 10803 sees trend line resistance at 10826.



S&P 500 TECHNICAL ANALYSIS – Prices broke above resistance at 1687.40, the May 22 swing high, overturning bearish cues noted last week and exposing the 100% Fibonacci expansion at 1710.90. The 1687.40 level has been recast as near-term support, reinforced by a rising trend line set from late June. A reversal back below that eyes the 76.4% level at 1675.10.



GOLD TECHNICAL ANALYSIS – Prices broke resistance at 1297.75, the 38.2% Fibonacci retracement, and moved to challenge the 1334.08-49.27 region marked by the 50% Fib and a rising channel set from late June. A further push higher beyond that aims for the 61.8% retracement at 1370.40. The 1297.75 level has been recast as near-term support.



CRUDE OIL TECHNICAL ANALYSIS– Prices turned lower as expected, completing a bearish Evening Star candlestick pattern. Initial support is at 105.06, with a break below that targeting the 38.2% level at 102.70. Near-term resistance is at 108.89, the July 19 high.


--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com


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THE TAKEAWAY: The US Dollar has descended to test another level of chart support while the S&P 500 rally has paused for a breather below the 1700.00 figure.

US DOLLAR TECHNICAL ANALYSIS – Prices continue to play out a bearish reversal identified two weeks ago, taking out support in the 10790-803 area to expose the 50% Fibonacci retracement at 10739. A further push beneath that targets the 61.8% level at 10675. Alternatively, a reversal back above 10803 sees trend line resistance at 10826.



S&P 500 TECHNICAL ANALYSIS – Prices broke above resistance at 1687.40, the May 22 swing high, overturning bearish cues noted last week and exposing the 100% Fibonacci expansion at 1710.90. The 1687.40 level has been recast as near-term support, reinforced by a rising trend line set from late June. A reversal back below that eyes the 76.4% level at 1675.10.



GOLD TECHNICAL ANALYSIS – Prices broke resistance at 1334.08, the 50% Fibonacci retracement, and moved to challenge the top of a rising channel set from late June (1355.13). A further push higher beyond that aims for the 61.8% retracement at 1370.40. The 1334.08 level has been recast as near-term support, with a turn back beneath that eyeing the 38.2% level at 1297.75.



CRUDE OIL TECHNICAL ANALYSIS – Prices turned lower as expected, completing a bearish Evening Star candlestick pattern. Initial support is at 105.06, with a break below that targeting the 38.2% level at 102.70. Near-term resistance is at 108.89, the July 19 high.



--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com


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This publication attempts to further explore the concept that mass movements of human psychology, as represented by the financial markets, are subject to the mathematical laws of nature and through the use of various geometric, arithmetic, statistical and cyclical techniques a better understanding of markets and their corresponding movements can be achieved.

USD/CHF:

• USD/CHF has declined steadily since failing at the 2x1 Gann angle line of the year-to-date high in the .9750 area
• While below the 4th square root progression of the year’s low at .9405 our near-term trend bias will remain lower in the rate
• Gann and Fibonacci levels between .9305 and .9325 look like the next downside pivot with clear weakness below needed to trigger another meaningful leg lower in the rate
• Near-term time cycle studies suggest Thursday is a minor turn window
• A close above .9405 is required to alleviate the immediate negative tone and turn us positive on the dollar

Strategy: Like holding short positions in USD/CHF while below .9405.

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
USD/CHF	*0.9305	*0.9325	0.9355	0.9380	0.9405

NZD/USD:

• NZD/USD has continued to move steadily higher since finding support near Fibonacci symmetry during the first half of the month
• While over .7860 our near-term trend bias will remain higher in the Bird
• The 4th square root progression of the year-to-date low in the .8030 is now key resistance and traction over this level is required to trigger a more important move higher
• A medium-term cycle turn window is seen early next week
• The third square root progression of the year’s low in the .7945 area is immediate support, but only weakness below .7860 will turn us negative on the Kiwi

Strategy: Like holding long positions in the Kiwi while over .7860.

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
NZD/USD	*0.7860	0.7945	0.7970	*0.8030	0.8075

EUR/GBP:

• EUR/GBP has come under steady downside pressure since failing last week near the the 1st square root progression of the year-to-date high in the .8720 area
• However, while above the 2nd square root progression of the year-to-date low in the .8580 area our near-term trend bias will remain higher
• As such, the .8720 remains critical resistance with clear strength above this level needed to set up another push higher in the cross
• Near-term cycle studies warn that the next couple of days are a turn window
• Clear weakness back below .8580 will undermine the immediate positive structure in the rate and turn us negative

Strategy: Like holding only reduced long positions while over .8580 as some clear cyclical headwinds are approaching over the next few days.

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
EUR/GBP	0.8545	*0.8580	0.8625	0.8670	*0.8720

Focus Chart of the Day: FXCM Dollar Index



It has been a couple of weeks since we last looked at the FXCM Dollar Index. The peak we were looking for in the index at the start of the month materialized right on schedule, but the correction that has followed has admittedly lasted longer than we expected as the index traded steadily lower through last week’s cycle turn window. The next turn window of significance for the index looks to be around the first half of next week and this is an ideal time for the broader USD uptrend to attempt to reassert itself. Continued USD weakness beyond this next turn window, however, would seriously undermine the positive cyclical picture that has been developing since early May. The 10,800 level looks like a key near-term pivot.

--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com


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USD/JPY Technical Analysis - Prices are consolidating below falling trend line resistance set from late May. Initial support is at 98.56, the 38.2% Fibonacci retracement, with a break below that targeting the 50% mark at 96.74. Alternatively, a push above the trend line (now at 100.60) aims for the 38.2% Fib expansion at 101.19.



--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com



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