Your weekly outlook of technical patterns and structure.

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

Forex: Dollar Weakness Ahead?

Daily Timeframe –

With the US Federal Reserve edging closer to reducing the target for the Fed funds rate, the US dollar (USD), according to the US Dollar Index – a geometric weighted average of the dollar’s value versus six major international currencies – is testing resistance and displaying signs of weakness.

Following a mild pullback from 104.80, yesterday’s action completed an inside candle formation at resistance from 105.04, which shares chart space with a 50-day simple moving average (SMA) at 105.06. Follow-through downside from here could have price target the 200-day SMA at 104.46, followed by support at 104.09.

Commodities: Spot Silver Poised to Breakout Higher

Daily Timeframe –

Despite price action whipsawing trendline support (drawn from the low of $22.31) at the end of June, spot silver (XAG/USD) remains comfortable above the ascending line, and the overall uptrend is intact for now.

Lately, bids and offers have been limited between support from $30.73 and local trendline resistance, etched from the high of $32.51. You may also acknowledge the potential for a bullish pennant pattern to form (from $31.49 to $30.08). Should a breakout higher unfold, as suggested by the underlying trend in this market, peaks from around $32.30ish call for attention, with a breach of these tops lifting price to levels not seen since late 2012.

Equities: S&P 500 Approaching Resistance

Daily Timeframe –

Risk assets continue to tear higher; the S&P 500 refreshed record highs of 5,635 at the close of trading on Wednesday.

The leg higher from 4,953 (19 April) has been robust, with corrections few and far between. However, potential resistance is seen overhead in the shape of a channel resistance (taken from the high of 5,325) and a 1.272% Fibonacci projection ratio at $5,686 (sometimes referred to as an ‘alternate’ AB-CD pattern, though these are generally traded when the pattern forms against the underlying trend).

While the resistance mentioned above is unlikely to prompt a reversal, it could trigger a moderate correction, one which dip-buyers may look to take advantage of from neighbouring support at 5,507, particularly at the point where the level merges with channel support (from the low of 5,011).

Cryptocurrency: BTC/USD Support in Play

Week to date, bitcoin is up +2.6% versus the US dollar (BTC/USD).

This follows a dreadful month in June, shedding -11%. As evident from the weekly timeframe, buyers and sellers are now squaring off at support from $56,796, a level converging closely with channel support, extended from the low of $60,717. Should price overthrow bids at aforementioned support, $51,948 warrants attention as the next downside objective, while extending recovery gains from current support could send the unit back to the upper channel resistance, taken from the all-time high of $73,845.

Across the page on the daily timeframe, price recently engaged with a 100% projection ratio at $54,678 (an equal AB=CD bullish pattern) and a 38.2% Fibonacci retracement ratio at $55,151, leading a pullback to trendline support-turned-resistance, taken from the low of $26,535. Should price venture north of here, this not only paves the way for a run toward resistance at $62,535, but it also adds weight to the bullish presence seen at weekly support noted above at $56,796.

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