Technical Analysis of Indices, Gold & FX pairs!

In this week's analysis, you will find a few technical charts on the following assets:

1. S&P 500 - Futures, CFD, ETFs;

2. Dow Jones - Futures, CFD, ETFs;

3. Gold - Spot

4. GBPUSD - Forex

5. GBPJPY - Forex

6. USDCAD - Forex

SPX 500 4H Chart

The US indices are still holding relatively strong in the shorter timeframe, which is a sign that this correction will take time to fully complete. The following are our main hypothesis for this week, which can change depending on incoming market information:

• HYPO #1 (short-term weakness again): Manage to hold resistance at 2875-2900 and start another wave of sell-off towards 2700-2635 as per the "alt (b)" wave;

• HYPO #2 (short-term strength and bear squeeze): Cross over 2875-2900 resistance; hold above on each pullback by spending time, and rally higher towards 3130-3200 in red wave (c).

DOW 4H Chart

The same can be said for DOW futures and CFDs as the hypos in SP500.

• HYPO #1 (bearish): Hold below upper-bound of channel at 24k and sell-off one more time on "alt (b)" wave;

• HYPO #2 (bullish): Strong breach above upper-bound of channel at 24k - spend time above and hold pullbacks then rally towards 25,200 & 27k respectively.

XAUUSD 4H Chart

We finally got the breakout off the triangle formation in Gold and still expecting the post-thrust move to continue towards at least 1774 then 1800 resistance. Pay attention to the nature of the pullbacks and as long as we do not go back below 1729, dips are to be seen as buy opportunities.

• Main support levels 1729-1720.

• Main resistance points: 1774 - 1790 - 1800.

GBPUSD 4H Chart

Another text-book technical pattern that played out in the last 2 weeks was the Head&Shoulders reversal pattern in GBPUSD. We had been shorting the Cable since 1.2300 and closed 80% of the position at Target 1 = 1.2160. The next target may easily be the support zone at 1.200-1.1920 if GBPUSD fails to trade above 1.2160 on Monday and Tuesday. We see no reason yet to start buying this market due to lack of clear stop loss.

GBPJPY 4H Chart

GBPJPY was weaker than the Cable counter-party and it is approaching the Fibonacci confluence zone at 161.8% extension & 61.8% retracement level: 129.30-128.46. We will be looking for a buy opportunity in this zone and observe the 1H timeframe for confirmation whether this support will hold or not.

• HYPO #1: Test both Fib levels and hold on the 1H timeframe above both and trade as per the blue-line scenario;

• HYPO #2: Test both Fib levels, but instead trade below 128.50, hence remain weak for further sell-off as per the red-line scenario.

USDCAD 4H Chart

A move above 1.4170 this week, will expose higher prices towards 1.4260 and 1.4350 respectively. If, instead, USDCAD fails to test 1.4170 and maintain the triangle formation, we will engage in a short trade with target at the lower-trendline (1.4000-1.3950).

In order to learn a daytrading strategy based on Volume then read our educational post - A Single Technical Indicator That Will Make Trading More Profitable! If you need further instructions on Support & Resistance then read our thoughts and observations on this post: How To understand support & resistance concept?

If you want to discuss your trading skills, strategy, risk management or anything else then book a free session with one of our experienced traders here!

Until next time, be a mindful trader.

Prepare-Execute-Adjust-Execute!