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 Index Testing Support

Daily Timeframe –

Following Fed Chair Powell’s comments yesterday, in which he emphasised a wait-and-see vibe, the US Dollar Index pulled lower from resistance at 105.04 and led the Index to support from 104.15. While further underperformance could materialise on the back of Fed uncertainty, 104.15 support is likely to be viewed as a technically important base for buyers, given the upward trend seen on both monthly and daily charts.

However, should sellers persist and take on 104.15 (thus opening a short-term bearish scenario), the next downside target between support at 103.62 and the 200-day and 50-day Simple Moving Averages at 103.79 and 103.87 calls for attention.

Commodities: XAU/USD Just Keeps on Giving

Amidst the expectation of falling real US rates, spot gold (XAU/USD) continues to attract bids and clocked a fresh all-time high of $2,304 in Asia this morning. Yesterday also wrapped up a seventh day in positive territory. According to the weekly timeframe’s Relative Strength Index (RSI), however, we are considerably overbought, hitting levels not seen since early 2021. The same can be seen from the daily chart’s RSI, hovering ahead of indicator resistance coming in from 87.21.

Ultimately, with the yellow metal navigating unchartered territory at the moment, traders and investors will likely be looking to buy dips. The nearest support level on the daily scale falls in at $2,223, closely followed by support on the weekly chart at $2,147.

Equities: S&P 500 Chalking up Potential Bearish Engulfing Candle

Weekly Timeframe –

While the S&P 500 finished last week notching up another week of upside, momentum has faded somewhat this week. This has left the weekly chart with a potential bearish engulfing candlestick formation. The signal focusses on the candle’s real body and overlooks the upper and lower shadows.

The bearish candlestick formation is unlikely to attract much attention in isolation, particularly in light of current demand, but what might help hand the baton over to sellers is the overbought conditions from the Relative Strength Index (RSI): the RSI is reacting from indicator resistance at 79.04, a level not seen since early 2020.

Should price continue to form a correction, either by way of fresh countertrend selling or profit taking, the next support target falls in at the 5,000 level, positioned near an ascending channel resistance-turned-potential support line, taken from the high of 4,607.

Cryptocurrency: $64,000 Support is Vulnerable

Following BTC/USD’s all-time high of $73,845 last month, the unit has largely been indecisive. Were a correction to unfold, weekly support warrants focus from $56,796. South of here, a decision point zone also deserves attention at $50,619-$53,057.

Out of the daily timeframe, you may also acknowledge that the pairing continues to fluctuate around the $64,000 psychological level. The fact that price was unable to print a higher high following the retest of the aforementioned number emphasises possible weakness here. Should follow-through selling be seen, a Fibonacci support zone between $50,567 (1.618% Fibonacci projection ratio) and $53,172 (38.2% Fibonacci retracement ratio) can be seen, which aligns with the weekly timeframe’s decision point underscored above.

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