S&P 500, Gold and the Dollar Await Anticipated Stimuli

By Gary Kerdus – DailyFX.com

THE TAKEAWAY: S&P 500 matches May 20, 2008 high and stalls whereas crude continues to trade in a range. The dollar pushed lower only to find potential support at a past bidding point and gold awaits FOMC.

S&P 500 – Prices bounced off support formed near the 1426.40 region (orange line) and pushed higher to match the May 20, 2008 high only to stall at this potential level of resistance. A break above 1440.20 may find resistance around the 1447.30 area which is defined by the grey rising channel line. Alternatively, a push below 1426.40 may expose the 1396.90 region which was past wedge support and resistance and may act as potential future support. Moreover, potential trendline support near the 1396.90 region is also marked be the rising grey line. The net sideways movement over the last four days is likely due to traders waiting for guidance from the FOMC policy decision later today.

CRUDE OIL – Prices appear to be firmly pressed up against falling trendline resistance (grey line) and the highs of consolidation around 97.64 (upper red line). A break above 97.64 may find the next level of potential resistance round 101.05 which was a level of past support and could act as a future ceiling of resistance. Alternatively, a move lower may find a sticking point at previously established consolidation support around 94.14 (lower red line). A break below 94.14 may find support around the 92.59 and 87.72 areas which were once previous levels of both resistance and support.

GOLD – Prices rallied to test channel resistance (grey line) at the 1746.98/oz area which was the high for the day and closed lower with an indecision daily candle. A break higher might find resistance around 1790.55/oz which was a previously established high on February 29. Alternatively, the next level of support is around 1629.17 area which was once consolidation resistance (blue line) and may extend to act as future support. To get to 1629.17 however, price would first have to trade below the aggressive rising trendline marked in grey which could act as support. Like the S&P 500, the sideways movement over the last few trading days is probably because traders are waiting for stimulus, or lack thereof, queues.

US DOLLAR – Prices pushed through descending channel line support (grey line) and are now testing the low established on April 30 at 9,816. This area may serve as a potential floor of support as traders have already proven to bid up the dollar it this level. A break lower may find the next level of potential support around 9,672 which was also a previous turning point established on February 8. Conversely, a push higher may find resistance around the 9,938 area which was a previous level of support and could now act as possible future resistance (orange line). Moreover, the orange level is also in line to converge with potential falling trendline resistance marked in grey. Finally, dollar traders should have a close eye on the FOMC as well.

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