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The US Dollar recoiled sharply lower after the S&P 500 found support and reversed higher, with technical positioning hinting a larger advance may be ahead.

THE TAKEAWAY: The US Dollar recoiled sharply lower after the S&P 500 found support and reversed higher, with technical positioning hinting a larger advance may be ahead.

S&P 500 – Prices put in a Bullish Engulfing candlestick pattern above support at a rising trend line set from late July, hinting a move higher is ahead. Initial resistance lines up at 1466.10, with a break above that targeting the top of a channel established from the June 4 low at 1481.80. Alternatively, a break below trend line support (now at 1437.60) exposes 1422.40.

US_Dollar_Sold_as_SP_500_Finds_Support_Hints_at_Gains_Ahead_body_Picture_5.png, US Dollar Sold as S&P 500 Finds Support, Hints at Gains Ahead

Daily Chart – Created Using FXCM Marketscope 2.0

CRUDE OIL – Prices bounced from support at 89.44, the 38.2% Fibonacci expansion, to challenge the 23.6% level at 93.60. A break above this barrier exposes the underside of a rising channel set from early July, now at 95.81. Alternatively, a reversal through support targets the 50% Fib at 86.04.

US_Dollar_Sold_as_SP_500_Finds_Support_Hints_at_Gains_Ahead_body_Picture_6.png, US Dollar Sold as S&P 500 Finds Support, Hints at Gains Ahead

Daily Chart – Created Using FXCM Marketscope 2.0

GOLD – Prices remain range-bound after taking out resistance at a falling trend line connecting major swing highs since early November 2011. Near-term resistance is at 1790.55, with a break above that targeting 1802.80. The trend line – now at 1747.61 – has been recast as support. A push back below that sees initial downside barriers at 1725.87 and 1687.84, the 23.6% and 38.2% Fibonacci retracements respectively.

US_Dollar_Sold_as_SP_500_Finds_Support_Hints_at_Gains_Ahead_body_Picture_7.png, US Dollar Sold as S&P 500 Finds Support, Hints at Gains Ahead

Daily Chart – Created Using FXCM Marketscope 2.0

US DOLLAR – Prices turned lower after putting in an Inverted Hammer candlestick below resistance at 9857, the 38.2% Fibonacci retracement. Sellers now aim to challenge the bottom of a falling channel set from the June 1 high, now at 9727. A push beyond that targets the February 8 swing low at 9672. Alternatively, a break above resistance initially exposes the 50% Fib at 9893.

US_Dollar_Sold_as_SP_500_Finds_Support_Hints_at_Gains_Ahead_body_Picture_8.png, US Dollar Sold as S&P 500 Finds Support, Hints at Gains Ahead

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

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This article was provided by DailyFX.com.