Markets at crossroads: Waiting for the next breakout/breakdown

Last week delivered several important technical tests, but very few decisive answers.

Across most markets, buyers and sellers are still fighting around the same key support and resistance zones we've been highlighting in recent reports. While a few assets confirmed last week's bearish scenarios, others continue to move sideways, waiting for fresh momentum.

USD (DF.F)

Let’s open today’s Lab Note by revisiting quote from July 9:

“(…) On the downside, the focus stays on 100.36-100.53, along with 100.32, the lower boundary of the orange consolidation. A daily close below that entire area would significantly strengthen the bearish case and shift attention toward the next downside cluster around 99.86-100.15 about which we wrote at the beginning of the month.(…)”

From today's perspective, we see that greenback has followed the bearish scenario we've been discussing almost perfectly. Last week's bearish engulfing pattern did exactly what sellers needed - it pushed the dollar below the lower boundary of the black rising channel and finished the day beneath the March highs, confirming the earlier breakout failure.

Since then, price has entered another consolidation, which has gradually turned into a classic pullback toward the previously broken lower line of the black rising channel. At the moment, this looks like a textbook verification of the earlier breakdown. As long as we don't see a daily close back above 100.84, the bearish scenario remains favored, with another test of the green support zone and the psychological 100.00 level still on the table.

Looking at the weekly chart, last week's candle closed below both the black support/resistance line (based on previous highs) and the 38.2% Fibonacci retracement discussed in our previous report. Although buyers briefly tested the lower boundary of the orange consolidation, they failed to reclaim those broken levels, turning former support into resistance.

Weekly momentum indicators (CCI and Stochastics) have also shifted in favor of the bears, adding another argument for downside continuation. When would this scenario weaken? A weekly close back above those resistance levels. And when can we expect a larger move? Once price finally breaks out of the current consolidation.

Daily Takeaway

•             Watch 99.86-100.15 support & 100.83 resistance

•             Daily close below support zone opens the door toward 99.00-99.26.

•             Bulls regain control only after a daily close above 101.21.

Long-Term Takeaway

The weekly picture remains a bit unclear as long as the greenback remains inside the current consolidation. 

Palladium (PA.F)

To frame today’s setup, let’s go back to last week’s quote:

“(…) Price has now reached a strong resistance zone reinforced by the upper boundary of the green rising channel, suggesting caution despite the recent strength.

(…) Failure there -> expect sellers to challenge 1250 first.(…)”

Looking at today's daily chart, we see that sellers took advantage of the recent rally and quickly regained control. Not only did they leave behind a fresh bearish gap (1259-1272.30), but they also tested the previously discussed downside target and the lower boundary of the green rising channel.

So, what's next?

Thanks to recent successful defenses of both the upper boundary of the orange consolidation and the lower boundary of the green channel, bulls are still in the game (at least, as long as they avoid a daily close below those support levels).

The first task for buyers is clear: close the bearish gap created on Friday. Only then they will have a realistic chance of revisiting last week's highs.

The weekly chart tells a very similar story to what we saw in the case of platinum.

Although palladium briefly moved above the multi-week consolidation, buyers failed to finish the week above 1296.50, sending price back inside the range.

That means last week's message still stands: only a weekly close above 1296.50 would confirm a stronger bullish breakout and open the door for a broader move higher.\

Daily Takeaway

•             First objective: fill the bearish gap at 1259-1272.30.

·       Watch 1296.50 & 1324-1363 resistance area.

•             As long as 1250 and lower line of the green channel hold bulls have a chance to trigger a rebound

•             Daily close below these supports strengthens the bearish case.

Long-Term Takeaway

Nothing has changed on the weekly chart. A weekly close above 1296.50 remains the key confirmation for a larger bullish continuation.

Stay sharp, stay patient, and don’t force trades in unclear conditions.