Stocks At Resistance: Watch Out For Higher Dollar
Hello traders!
Hello traders!The U.S. dollar is moving lower for some time now, driven by higher equity and commodity market, especially oil, which reached 82-83 dollars per barrel recently, and rose for almost $4 since Sunday open. Technically, oil moved into a powerfully Fibonacci resistance level, 76.4% retracement area of a previous decline (87.10-67.00), where usually a choppy and corrective structure reverses.
On the daily chart shown below, an upward structure from 67 region is very complex wave II, counted as double zig-zag move, which should be extremely near completion. Move to 83.50 is possible, before prices collapse.
We are also looking for a top of an upward zig-zag formation on the S&P 500, which seems to be trading in final stages of a current up-trend. One hour chart shows that a red wave 5), final sub-wave of wave (C) of a larger wave II, is underway, and will probably test the 1130-1140 resistance region in the coming sessions. Traders will watch this level very carefully, from where a technical bounce on the down-side may easily appear.
So, if S&P and Oil up-trends are near completion, then top on Aud/Usd should also be very near. However, be careful with any Short positions on that one for now, as we may see test of 0.9200 zone, before a turning point can be seen.
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by: Grega Horvat