Technical Market Outlook and Review Ahead of NFP

EUR/USD

Having recent price action puncture weekly Quasimodo support-turned resistance at $1.0888, as well as neighbouring prime resistance on the daily chart at $1.0954-1.0864, additional buying is on the table towards daily Quasimodo resistance at $1.1138 and weekly resistance coming in from $1.1174.

Largely confirmed on the daily scale through the series of higher highs and higher lows, the uptrend has been active since rebounding from daily support at $0.9573 (and weekly support at $0.9606). Additional trend confirmation is visible through price crossing above its 200-day simple moving average, currently fluctuating around $1.0316. We can also see that the moving average is starting to level off from its down move: another sign of a potential trend reversal to the upside. Despite the bullish vibe, the daily chart’s Relative Strength Index (RSI) reveals early signs of negative divergence ahead of overbought space.

Out of the H1 chart, Thursday saw the unit rebound from $1.09 following a violent bull trap forming north of $1.10.

Space below $1.09 calls on a support zone at approximately $1.0870ish, made up of a 61.8% Fibonacci retracement at $1.0868 and a 50.0% retracement from $1.0872. Exploring under here exposes trendline support, extended from the low $0.9730 and the $1.08 figure.

Therefore, with both weekly and daily charts suggesting vulnerable resistances and a clear uptrend, the support area on the H1 between the 61.8% Fibonacci retracement at $1.0868 and the $1.09 figure could offer buyers a platform to work with today (yellow oval).

S&P 500

Recent movement on the S&P 500 has largely been one sided since the index journeyed above weekly trendline resistance last week, taken from the high at 4,818. Up 2.7% on the week, the next level of resistance to perhaps throw a spanner in the works is Quasimodo resistance on the weekly scale at 4,177, closely shadowed by the 4,325 15 August high (2022). Rupturing the aforesaid weekly trendline resistance hints at the possibility of further buying, in line with the monthly timeframe’s longer-term uptrend. Consequently, the current 4,177 resistance is an important watch right now. Adding to the bullish case on the weekly chart is the Relative Strength Index (RSI) venturing above the upper boundary of an ascending triangle between 53.72 and 30.47. While these formations are generally found in uptrends, they can also forge reversal signals.

From the daily timeframe, following price crossing above resistance at 4,087 (now a potential support), limited resistance is visible until the 4,325 15 August high mentioned on the weekly scale. On the daily timeframe, this peak is closely followed by a 100% projection at 4,378: an AB=CD pattern, as well as a 78.6% Fibonacci retracement at 4,391 and a 200% extension at 4,431.

Finally, on the H1 timeframe, Quasimodo resistance at 4,183 deserves notice, welcoming price action in recent hours. To the downside, support calls for attention at 4,100, positioned closely with a trendline support, taken from the low 3,885. A push above the current resistance, as the higher timeframes suggest, unmasks a possible breakout buying opportunity in the direction of at least H1 Quasimodo support-turned resistance at 4,219.

Monthly, Weekly and Daily Charts:

H1 Chart:

XAU/USD (Gold)

Evident from the weekly and daily timeframes, momentum to the upside has slowed, despite the trend in this market facing northbound. Both higher timeframes have touched gloves with overbought conditions on the Relative Strength Index (RSI). The daily timeframe is also pencilling in negative divergence. While the weekly timeframe shows support being retested at $1,916, the daily timeframe indicates sellers are likely to take the wheel. The daily rising wedge pattern (between $1,929 and $1,896) experienced a breach and has since had its lower edge retested (leaving nearby resistance at $1,966 unchallenged [Quasimodo formation]). Continued bearish pressure subsequently witnessed price challenge the spirit of trendline support, etched from the low $1,616, which could pave the way back to a fresh decision point at $1,867-1,886.

Meanwhile price action on the H1 timeframe charged through the $1,920 low (Wednesday) and is set to take aim at familiar Quasimodo support coming in at $1,903 and the nearby trendline resistance-turned support, drawn from the high $1,949. Areas of interest higher up can be seen at a decision point from $1,947-1,943 (formed during Thursday’s push lower in early US trading) and neighbouring Quasimodo resistance from $1,954.

Overall, sellers appear in control, targeting the noted H1 support structure. Engulfing these levels also signals weekly support at $1,916 is in a vulnerable location and could ultimately open things up for further downside towards the daily timeframe’s decision point at $1,867-1,886.

BTC/USD

Thursday refreshing highs not seen since August 2022 energises the possibility of reaching the weekly timeframe’s falling wedge (between $25,214 and $17,567) pattern objective at $25,698, closely trailed by resistance at $28,844. This, of course, is in line with the chart’s Relative Strength Index (RSI) voyaging north of its 50.00 centreline (followed by positive divergence).

In spite of price recently battling to fresh highs, momentum has undoubtedly slowed in recent weeks, demonstrated more evidently on the daily chart. This is also displayed through the timeframe’s RSI shaking hands with indicator resistance at 89.35 and carving out negative divergence. In terms of resistance, the Quasimodo formation at $24,666 warrants attention, a touch shy of the weekly pattern profit objective mentioned above at $25,698.

Shorter-term price action shows the crypto reclaiming position above the $24,000 line on the H1 chart, casting light towards a nearby Quasimodo resistance at $24,319. This helps confirm the bullish setting seen on the weekly and daily charts, as a break of $24,319 would essentially lay the foundation for a run to daily Quasimodo resistance from $24,666 and maybe the weekly chart’s profit objective at $25,698.