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The Pattern Pulse—22 February 2024

The Pattern Pulse—22 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: Bad News for USD Longs?

Daily Timeframe –

According to the US Dollar Index, dollar longs are under pressure. Despite technically exhibiting an uptrend, there are signs of technical weakness emerging. Since topping at 104.97 in mid-February (just shy of resistance at 105.04), price action has tunnelled through support at 104.15 (now marked resistance) in addition to channel support, extended from the low of 100.62. Adding to the bearish vibe, we can see that the Relative Strength Index (RSI) crossed under trendline support, taken from the low of 29.59, and also pushed through the 50.00 centreline, a move emphasising negative momentum.

As you can see from the chart, buyers and sellers are now squaring off at the 200-day simple moving average (SMA) around 103.72 and fast approaching neighbouring support at 103.62. Should sellers change gears here, therefore, and overthrow current supports, further underperformance could be on the table for the USD, targeting the 50-day SMA at 103.09 and support coming in at 102.92.

The Pattern Pulse—22 February 2024, FP MarketsCommodities: XAU/USD Bulls Outperforming

Daily Timeframe –

Following on from last week’s analysis on spot gold (XAU/USD), you will note that the yellow metal did tunnel through the widely watched $2,000 level in recent trading and shake hands with support between $1,971 and $1,986—made up of an AB=CD bullish pattern (100% projection ratio), horizontal support as well as a number of Fibonacci ratios.

As you can see from the chart, buyers have responded from the upper edge of the support zone, and the price made its way back above $2,000.

Things are now looking positive for the yellow metal, on track to print its sixth day in positive territory. And with the longer-term trend facing northbound, overhead resistance at $2,038 is likely to be challenged and maybe dethroned in favour of further upside towards weekly resistance at $2,075.

The Pattern Pulse—22 February 2024, FP MarketsEquities: S&P 500 to Test Support?

Daily Timeframe –

As noted in previous research, it is clear from all three timeframes—the monthly, weekly and daily timeframes—that the S&P 500, unsurprisingly, is trending northbound after having refreshed all-time highs last week at 5,048.

However, from the daily timeframe, we can clearly see buying has stalled around the 5,000 level and appears poised to sign off on an equivalent AB=CD bullish pattern, shown by way of a 100% projection ratio at 4,906 that resides just ahead of a support area at 4,869-4,903. Collectively, this technical confluence could provide enough support for dip-buyers to enter the fray and attempt to retake 5,000 again.

The Pattern Pulse—22 February 2024, FP MarketsCryptocurrency: BTC/USD Pencilling in Broadening Pattern

H4 Timeframe –

Following a spirited push to the upside in recent weeks, the BTC/USD pairing has taken a breather in recent price movement and formed what many technical analysts may recognise as a broadening pattern (formed by two diverging lines taken from $52,868 and $51,372).

However, what is interesting and the reason why this market has made this list this week is due to the fact that broadening patterns can sometimes form the beginnings of a diamond top pattern. As shown from the chart, the second part of the diamond top formation extends from the broadening formation in the shape of converging lines. This is considered a notable bearish reversal pattern, and considering it is forming around weekly resistance at $51,952, BTC/USD bulls may struggle to find acceptance at higher prices and may prompt a retest of $50,000.

The Pattern Pulse—22 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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