US500 is down by 5.15% in the last 12 months

US500 is down by 5.15% in the last 12 months, it could continue to fall in the next quarter.

US500 or S&P 500 index closed lower by 1.79% this Monday, December 5th decreasing by 72.86 points. Looking back at the last four weeks, US500 lost 5.15%. Over the past 12 months, the index fell by 12.82%. It is more likely that the Index will fall towards the next quarter based on the analysts’ expectations. The Dow Jones and Nasdaq dropped by 1.40% and 1.93 per cent respectively.  

US500 Daily Chart Directional bias - 1 Week 

Trade Insights – US500

The chart shows viable long positions above the pivot at 4007 with the target to test the key resistance Level at 4060 and then the test of the resistance zone between 4120 to 4140.

Alternatively, possible short positions below the pivot at 4007 heading towards the target of the key support level at 3910 and then the further test of the support zone between 3830 to 3800.

Oil and US Dollar Comparison Chart

The WTI Crude has fallen below $77 per barrel and the US dollar index DXY rose to above 105 on Monday after touching an almost 6-month low at 104.11 earlier in the session. The dollar’s recovery is primarily due to renewed prospects of a more aggressive Federal Reserve due to better-than-expected economic data. The investors expect that the peak of the Funds rate is going to be higher than expected earlier. The US services gauge rose in November and last week’s US job report is stronger than expected.

XAU/USD – Gold dropped on renewed prospect of aggressive Feds.  

Chart Analysis:  Gold prices retrieved about 1.5% to move below $1770 on Monday, the reversal is from the 5-month high of $1810 that gold hit earlier on Monday. There are renewed prospects of the aggressive federal reserve, and this moved the Dollar and US treasuries higher putting pressure on gold prices.

The gold chart shows that the pair has now dropped sharply from the Resistance Zone on the Chart at $1810 to $1820, The drop pushed the pair to touch $1765, the Fibonacci level of 23.60% which is also the Major Pivot point on the chart. Could this be a step back from the next move higher or is this a start of a correction in the gold prices to be seen? The recent boost in gold prices was a result of the Falling US dollar and decline in the US Treasury yields that are stabilizing now.

The 20-day SMA is rising to provide support to the prices at the current level and the 50-day SMA is gradually turning upwards. The MACD line is turning downward to cross below the orange signal line depicting the bearish bias of the investors.

Please check the Chart Trading Insights below

• Resistance Zone: $1810 to $1820
• Key Resistance Level: $1790
• Major Pivot Point: $1765
• Key Support Level: $1735
• Support Zone: $1715 to $1700
• 200 Day SMA – Green Line
• 50 Day SMA – Red Line
• 20 Day SMA – Blue Line

Daily Chart Directional bias - 1 Week 

Viable Trade Signal - XAU/USD

Possible long trade – above pivot point at $1765

TP 1 - $1790

TP 2 - $1810

TP 3 - $1820

Enter Short Trade – Below pivot point at $1765

TP 1 - $1735

TP2 - $1715

TP3 - $1700