Press Release: Markets Likely Resting Prior to FOMC as S&P 500 Stalls, Crude Rangebound

With the FOMC policy decision on tap markets appear to be in wait-and-see mode as the S&P 500 and Crude have stalled along with Gold. The Dollar fell to potential support.

THE TAKEAWAY: US Dollar broke lower to find potential channel support while S&P 500, Crude testing resistance.

S&P 500 – Prices appear to have found support around the 1,426.40 area which was a previous level of past resistance (orange line). It’s possible for the S&P 500 to trade sideways leading up to the FOMC monetary policy decision on Thursday. A break above established resistance at the May 20, 2008 high could initially target the 1447.30 area which is at the top of potential trend channel resistance line (grey line). Alternatively, a break below 1426.40 may find support around the 1396.90 area where previously established wedge support and resistance (red lines) would extend to meet.

Daily Chart – Created Using FXCM Marketscope 2.0

CRUDE OIL – Prices have nudged back up against the descending trendline marked in grey and still appears to be trading in a range established between the highs of resistance around 97.64 down to the lows of support around the 94.14 area (red lines). A break higher may find resistance around the 101.05 area which was previously established support and may act as future resistance. Conversely, a break below 94.14 may find support around 95.59 which was previous resistance and acted as a floor of support already in the early part of August. Like the S&P 500, it’s possible for oil to trade sideways leading up to the FOMC policy statement.

Daily Chart – Created Using FXCM Marketscope 2.0

GOLD – Prices are stalling below the 1740/oz figure after finding resistance near the upper portion of the aggressive ascending channel marked by the grey lines. A push higher may find resistance around the 1790.55 area which was a high established on February 29. Alternatively, a break below the channel could initially target the 1629.17/oz area which served as consolidation resistance marked by the blue line. The next level of potential support could be where both red lines meet around 1608.53/oz. This area was formerly a congestion area and may serve as a floor to bolster falling prices.

Daily Chart – Created Using FXCM Marketscope 2.0

US DOLLAR – Prices traded through the blue channel line of support and found a potential sticking point at the grey channel line at around 9,851. The next potential level of support is marked around 9,816 which was a prior turning point as shown on the graph. If prices reverse higher and break above both the blue and grey channel resistance lines, then the next possible level of resistance is marked in red around 10,067 which was a prior turning point on seven different occasions.

Daily Chart – Created Using FXCM Marketscope 2.0

This article was provided by DailyFX.com.