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The Pattern Pulse—1 February 2024

The Pattern Pulse—1 February 2024, FP Markets

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.

The Pattern Pulse—1 February 2024, FP MarketsCommodities: 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.

The Pattern Pulse—1 February 2024, FP MarketsEquities: 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.

The Pattern Pulse—1 February 2024, FP MarketsCryptocurrency: 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.

The Pattern Pulse—1 February 2024, FP MarketsDISCLAIMER: The information contained in this material is intended for general advice only. It does not consider your investment objectives, financial situation or particular needs. FP Markets has made every effort to ensure the accuracy of the information as at the date of publication. FP Markets does not give any warranty or representation as to the material. Examples included in this material are for illustrative purposes only. To the extent permitted by law, FP Markets and its employees shall not be liable for any loss or damage arising in any way (including by way of negligence) from or in connection with any information provided in or omitted from this material. Features of the FP Markets products including applicable fees and charges are outlined in the Product Disclosure Statements available from FP Markets website, www.fpmarkets.com and should be considered before deciding to deal in those products. Derivatives can be risky; losses can exceed your initial payment. FP Markets recommends that you seek independent advice. First Prudential Markets Pty Ltd trading as FP Markets ABN 16 112 600 281, Australian Financial Services License Number 286354.



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