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US Dollar Index, Dow Jones & S&P 500: Technical Checks

US Dollar Index [I.USDX]

Even if the eight-month old descending trend-line confined the US Dollar Index (I.USDX) up-moves during late-July, the gauge bounced-off from 100-day SMA during early weekdays. However, the greenback index seems losing its momentum, as indicated from downward slanting RSI, signaling a quick re-test to 38.2% Fibonacci Retracement of its December 2015 – May 2016 decline, at 95.20, quickly followed by 100-day SMA level mark of 95.00. Should the US jobs report print weaker details, the index can dip below 95.00 by testing 94.20 and the 93.60 supports while its further downside below 93.60 can brighten chances of extended plunge towards 93.00 and the May lows of 91.90. On the upside, a clear break above 96.00 immediate resistance can trigger the gauge's rise to 50% Fibo level of 96.25 and then to 200-day SMA level of 96.65. However, its additional advances beyond 96.65 might again needs to confront with 61.8% Fibo level of 97.25 & the mentioned trend-line of 97.40. If at all the index manages to surpass 97.40, it becomes capable enough to challenge 98.50 resistance mark.

Dow Jones Industrial Average [DJI30]

Ever since the overbought RSI, backed by Fed's disappointment dragged the DJI30 from 18636, the equity benchmark keep observing short-term descending TL which now signals its additional decline to 18240 and then to April highs around 18100. Given the gauge drops below 18100, 50-day SMA level of 18060 and the 18000 psychological magnet can come into play. During its sustained downtrend below 18000, the index can test 17900 and the 17780 support levels. Meanwhile, a clear break of 18450 trend-line resistance can trigger its upside to 18565 and 18636 before challenging the 61.8% FE of its January – April upside, near 18720. Should it successfully clears 18720, chances of its rally towards 18800 and then to the 19000 mark becomes brighter.

S&P 500 [SP500]

Unlike DJI30, the SP500 favors more of its upside than the otherwise with 2176 being immediate resistance, breaking which 2190 becomes an important level, comprising upward slanting trend-line and 61.8% FE of its February – June upside, for the equity gauge watchers to observe. If the upbeat US economics help the index to surpass 2190 mark on a closing basis, it can clearly run above 2200 mark and aim for 100% FE level of 2310. On the flipside, 2158 and the 2145 are likely nearby supports for the index to test before revisiting the June highs of 2128 and the 50-day SMA level of 2119. Given the index sustains closing below 2119, the 2110 and the 2100 might act as buffers during its southward trajectory towards 2070 support mark.

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Monday, 08 Aug, 2016 / 5:27

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