Your weekly outlook of technical patterns and structure.

The Research Team scans the financial markets for you, highlighting clear and actionable technical structures.

Forex: EUR/USD Finishes January Forming a Bearish Engulfing Candle

Monthly Timeframe –

From the monthly timeframe of the EUR/USD, we can see that the major pair continues to remain in a downtrend and, following the latest pullback from September (2022) lows of $0.9536, this could be viewed as a sell-on-rally scenario. This is emphasised through January’s bearish engulfing candlestick formation that took shape just south of resistance at $1.1233 and off the 50-month simple moving average (SMA), which currently trades at $1.1139.

Therefore, in view of the bearish suggestions, follow-through selling could unfold over the coming months, targeting support at $1.0516.

Commodities: WTI Oil Reacting from AB=CD Resistance

Daily Timeframe –

As was communicated in last week’s release, price action on the daily timeframe of WTI oil has been trending lower since topping at $94.99 in late September 2023, shaped by a series of lower lows and lower highs. The Research Team also shined a light on an AB=CD pattern at $77.80 (denoted by a 100% projection ratio). Adding to this pattern’s credibility were the surrounding ratios (some Fibonacci, some not) between $78.75 and $78.25.

The last few days have seen the unit test and reject the above-noted area and withdraw lower. It is common for AB=CD traders to plot downside support targets through the 38.2% ($74.86) and 61.8% ($72.15) Fibonacci retracement ratios derived from legs A-D.

Equities: Resistance and Negative Divergence for the S&P 500

Weekly Timeframe –

We’re back with the S&P 500 this week, and for good reason.

Following a three-week winning streak, the market index is poised to end this week on the ropes and hand over what many technical eyes will recognise as a weekly bearish outside reversal candle (albeit we need to engulf the prior week’s low). Couple this pattern’s bearish cue in a market trending higher and price rejecting channel resistance taken from the high of 4,607 as well as the Relative Strength Index (RSI) displaying early signs of negative divergence/overbought, and this could be enough to trigger further technical selling.

Given the technical evidence, follow-through selling may materialise to form a moderate correction back to retest the mettle of weekly support coming in from 4,743 and perhaps ignite dip-buying.

Cryptocurrency: ETH/USD on the Doorstep of Support

Daily Timeframe –

From the daily timeframe of ETH/USD, many will recognise the major altcoin has exhibited a gradual upside bias since mid-2022. Along the way, resistance shaped at $2,122, which has since transitioned to support following retests of the level after it broke higher in December 2023.

Combined with a 50.0% retracement ratio, price is closing in on $2,122 support once more, following January refreshing highs at $2,716 (hitting levels not seen since May 2022). The question is whether dip-buyers will defend the level again and target new highs in the uptrend.

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