Charts: TradingView

EUR/USD

Against the US dollar, Europe’s common currency came under fire on Wednesday, erasing 0.5% at the close of European trading. This hauled the EUR/USD currency pair back under its 50-day simple moving average at $1.0718 and shined the technical limelight on daily support at $1.0602. The aforementioned level remains a key watch in this market and will likely welcome price this week. Rupturing this barrier paves the way for an approach to daily support from $1.0412, closely followed by the 200-day simple moving average at $1.0324.

Knowing we have also crossed beneath trendline support on the daily timeframe taken from the low $0.9730, alongside the daily price close under the 50-day simple moving average and the Relative Strength Index (RSI) maintaining position beneath the 50.00 centreline, daily flow is poised to transition into a downtrend.

The situation on the weekly timeframe remains unchanged from my previous analysis (italics):

The key technical development on the weekly chart is the formation of a shooting star. As you can see, the individual bearish candle configuration also shares chart space with the weekly Quasimodo support-turned-resistance at $1.0888. This, coupled with last week’s follow-through decline and the pullback off the late September lows (2022) at $0.9536 in a market trending south since 2021, might be viewed as a sell-on-rally opportunity to weekly support at $1.0298.

Finally, across the page on the H1 chart, we can see Wednesday nosedived through the $1.07 figure and shook hands with H1 Quasimodo support from $1.0667. Below, eyes will be on another layer of support at $1.0635 and then the $1.06 figure.

Direction:

H1 Quasimodo support at $1.0667 is in the spotlight. Given the position of the higher timeframes and the threat of a downtrend emerging, $1.0667 bids are likely to be thin. As a result, a retest at the underside of $1.07 or a breakout under $1.0667 could entice short-term selling towards H1 support at $1.0635 and then the $1.06 figure, which aligns with daily support from $1.0602.

 S&P 500

On Wednesday, the US morning session observed subdued price action across major US equity indices. Consequently, developments in the bigger picture remain unchanged. The following points, therefore, will echo thoughts from my previous analysis (italics):

Technically, 4,087 is serving as support on the daily scale, which has bolstered the recent Golden Cross: the 50-day simple moving average (3,972) crossing above the 200-day simple moving average (3,943). The 4,087 rebound also brings light to the weekly resistance at 4,177. Shaped by way of a Quasimodo formation, which welcomed sellers in recent trading, this level is now in a vulnerable position. Knowing the overall trend faces northbound (monthly chart), overthrowing the aforementioned weekly resistance unearths a possible run to the 4,195 2 February high. Buyer health is also underpinned by the weekly chart’s Relative Strength Index (RSI) venturing above the upper boundary of an ascending triangle between 53.72 and 30.47. Maintaining position north of the breached limit casts light towards the overbought threshold (70.00).  

Meanwhile, on the H1 timeframe, price action continues to explore space above the 38.2% Fibonacci retracement at 4,074 and trendline support, drawn from the low of 3,803. This casts light towards Quasimodo resistance at 4,183—a level boasting a connection with the weekly resistance at 4,177 and is set just beneath H1 Quasimodo support-turned-potential resistance from 4,219.

Direction:

According to chart studies, this is still a buyers’ market, and a break of the weekly resistance level at 4,177 is likely. Therefore, a retest of the H1 timeframe’s trendline support could take shape, a move that may attract buyers to target the H1 Quasimodo resistance at 4,183 and perhaps beyond to the H1 Quasimodo support-turned-potential resistance from 4,219.

Monthly, Weekly and Daily Charts:

H1 Chart:

XAU/USD (Gold)

For those who read the recent technical briefing, you may recall the following text (italics):

In light of the H1 support breach at $1,857 and the 50-day simple moving average on the daily timeframe ($1,858) poised to give way, chart studies suggest sellers are likely to remain in the driving seat, targeting daily support from $1,828, followed by weekly support coming in at $1,807. Beyond here, the precious metal could aim as far south as the daily chart’s pattern profit objective (derived from a daily bearish flag between $1,881 and $1,862) from $1,768 (and the nearby 200-day simple moving average at $1,776).

The price of spot gold against the US dollar fell more than 1.0% on Wednesday and price is now on the doorstep of the daily support at $1,828, which is joined by a 38.2% Fibonacci retracement ratio at $1,827, and, as noted above, fixed just north of weekly support at $1,807.

Across the page on the H1 scale, we can see that price action is on the verge of connecting with Quasimodo support from $1,827, closely shadowed by a 1.272% Fibonacci projection (alternate AB=CD pattern) at $1,824. This happens to share chart space with daily support mentioned above at $1,828.

Direction:

Attention is now on the daily support at $1,828. Therefore, sellers are in command at current prices, such that short-term bearish plays could be pursued until $1,828.

However, given the technical confluence bolstering daily support from $1,828: the 38.2% Fibonacci retracement on the daily at $1,827, and the H1 supports between $1,824 and $1,827, this might be an area that buyers prepare to stage a recovery from.

BTC/USD

Kicking off from the weekly timeframe, given the recent turnaround in price to the upside, the focus is back on the weekly pattern structure. My latest Weekly Market Insight noted the following (italics):

In the company of the weekly timeframe’s Relative Strength Index (RSI) voyaging north of its 50.00 centreline (followed by positive divergence), BTC/USD appears poised to target a falling wedge (between $25,214 and $17,567) pattern profit objective at $25,698, closely trailed by resistance at $28,844.

As evident from the daily timeframe, the unit came within a whisker of crossing swords with demand at $20,548-21,326 on Monday and through Tuesday and Wednesday’s sessions, upside has gained speed. This—coupled with the RSI crossing back above the 50.00 centreline (positive momentum)—could have the major cryptocurrency take aim at the $24,262 2 February high, which happens to be sheltered south of a Quasimodo resistance at $24,666 (arranged just under the weekly timeframe’s pattern profit objective at $25,698).

I noted the following in recent writing regarding trend direction on the weekly and daily timeframes (italics):

Trend direction on the bigger picture is currently offering conflicting opinions. The weekly timeframe remains in favour of sellers—yet to show a higher low and subsequent higher high to transition to an uptrend. On the other hand, the daily timeframe is considered trending higher, and last week’s correction may be just that: a correction within the uptrend which opens the door for dip-buying opportunities. Supporting the current uptrend, of course, is the Golden Cross that was established last week: the 50-day simple moving average at $20,673 venturing above the 200-day simple moving average at $19,697.

Based on the H1 timeframe, buyers are in the driving seat. Recent upside pushed through resistance at $22,336, a trendline resistance drawn from the high of $24,262, and a Quasimodo resistance level at $22,789. The aforementioned levels are now considered potential support. Overhead, resistance is not expected to emerge until around two Quasimodo formations at $23,348 and $23,474.

Direction:

Should buyers hold the H1 Quasimodo resistance-turned-support level from $22,789, this could serve as a platform to extend recovery gains, targeting H1 Quasimodo resistance at $23,348, in line with scope for higher prices on the bigger picture.

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