Dollar May Recouple with Risk Trends as Stocks, Oil Position for Losses
Dollar May Recouple with Risk Trends as Stocks, Oil Position for Losses
US DOLLAR INDEX – The greenback has been locked in consolidation within a well-defined range since late November, with prices showing a Doji candlestick at support and hinting that an upswing is ahead. Confirmation on a daily close above 79.59 opens the door for a move back toward the range top.
MSCI WORLD STOCK INDEX – Prices have entered consolidation coming off a test of
resistance connecting major highs since early December, with the 23.6% Fibonacci retracement of the 1/10-1/13 upswing acting as near-term range support. Negative RSI divergence argues for a bearish bias, with a breakout lower initially exposing the 38.2% Fib level.
CRUDE OIL – Prices are drifting sideways having put in a bearish Dark Cloud Cover candlestick after retesting support-turned-resistance at rising trend line set from the swing bottom in November. On balance, positioning hints that a move lower is ahead. Initial support lines up at $87.33.
GOLD – Prices followed a Bearish Engulfing candlestick pattern below resistance at $1388.38, the 50% Fibonacci retracement of the 1/3-1/7 downswing, with a break through support at a rising trend line set from late October. Final confirmation of a larger bearish reversal requires a daily close below $1361.39, an outcome that would clear the way for a decline to the $1325-30 region. The trend line (now at $1368.32) has been recast as near-term resistance.
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