The market just reached decision time

The last few sessions have delivered exactly what traders love and hate at the same time: strong moves followed by equally strong questions.

The dollar continues to push into key resistance while precious metals are trying to stabilize after reaching several downside targets discussed earlier this week. The good news? Many of the scenarios we outlined played out almost exactly as expected. The challenge now is determining whether we're seeing the start of a reversal or simply another pause before the next leg lower.

As always, today's daily closes may tell us far more than the intraday noise. 

Dollar Index (DX.F)

Let's start with a quick recap before moving to today's update. On Tuesday, we wrote the following:

“(…) If buyers manage to close the day above the upper boundary of the channel, the breakout would open the door toward (at least) the next resistance zone near 101.39-101.59 (…)”

Looking at the chart from today's perspective, we can see that the market followed our Tuesday roadmap almost perfectly. Holding above the upper boundary of the rising channel helped the Dollar Index push into the next resistance zone around 101.39-101.59 during yesterday's session.

So, what's next?

The first warning signs are starting to appear. Momentum indicators are now showing negative divergences against price, suggesting that the recent breakout above the channel could soon face its first real test.

That said, bulls still deserve the benefit of the doubt for now.

As long as the market continues closing above former channel resistance, buyers remain in control and still have a chance to attack the next upside target around 101.74-101.81, where the 138.2% Fibonacci extension and the May 2025 intraday high come into play.

On the flip side, if sellers regain control and force a daily close back below this key support line, the breakout would immediately come under pressure. In that scenario, the first downside target would likely be a retest of the previous breakout zone near 100.50-100.53. 

Platinum (PL.F)

Before diving in, let’s revisit Tuesday’s quote:

“(…) If buyers fail to reclaim 1665 by today's close (in other words, they do not manage to hold the bullish gap from June 12), a test of the 1600 area becomes increasingly likely (in line with Friday’s scenario) - especially if the dollar continues higher. (…)”

Looking at the chart, we see that platinum also delivered exactly what bears were looking for, testing the support area and the lower boundary of the declining orange channel.

The interesting development here is the appearance of bullish divergences on daily indicators (in other words, momentum is no longer fully confirming the decline) - something we're also seeing in gold and silver.

Could a reversal be forming?

Maybe.

But the chart isn't there yet.

The main issue is that platinum remains below both the June 11 low and the March low, while yesterday's bearish gap between 1651 and 1662 continues to act as overhead resistance.

For bulls, the mission is simple: fill the gap. Therefore, a daily close above 1662 would be the first meaningful signal that buyers are starting to regain control.

Until then, rebounds should be treated as potential retests of prior breakdown levels rather than evidence of a new uptrend. 

Palladium (PL.F)

We start today by picking up where Tuesday’s quote left off: 

“(…) price is now trading below the lower boundary of the June 12 bullish gap.

That is not what buyers wanted to see.

Why?

Because a sustained move below that gap would put the previously discussed double-bottom structure at risk.

(…) The market may soon start focusing on another leg lower. (…)”

From today’s point of view, we see that palladium followed the mentioned bearish roadmap. 

Tuesday's close below the lower boundary of the June 12 gap triggered another bearish gap during yesterday's Asian session (1238-1243), sending prices below the June 8 and June 10 lows and invalidating the previously developing double-bottom formation.

However, sellers ran into a problem.

The market reached a support zone based on the 88.6% Fibonacci retracement and the green support line based on the previous lows, which has successfully absorbed selling pressure over the last two sessions.

As a result, today’s Asian session opened with a small bullish gap (1174.90-1182) and bulls now have an opportunity to launch a counterattack.

The key level to watch is 1201.

Why?

Because without a daily close above that level, today's rebound remains nothing more than a verification of yesterday's breakdown.

And even if buyers manage to reclaim 1201, they still have to deal with the bearish gap overhead, which remains a significant barrier for any larger recovery attempt.

Just like gold, silver, and platinum, we are seeing bullish divergences on some indicators but at this stage they are warnings, not signals. 

Today’s takeaway

For Dollar:

•             Watch 101.39-101.59 resistance zone

•             Break above 101.59 -> opens the door toward 101.74-101.81

•             Watch for growing bearish divergences

•             Daily close below former channel resistance -> increases odds of a bigger pullback

•             Break below 100.50-100.53 -> confirms deeper downside correction
For Platinum:

•             Watch 1651-1662 resistance zone

•             Daily close above 1662 -> first bullish confirmation

•             Below 1662 -> rallies remain suspect and sellers retain the advantage

•             Bullish divergences are appearing, but confirmation is still required

•             Next support zone: around 1542

For Palladium:

•             Watch 1201 resistance

•             Daily close above 1201 -> improves the very short-term outlook

•             Below 1201 -> rebound remains a breakdown retest

•             Further downside cannot be ruled out until buyers deliver confirmation

Final thought

This week continues to reinforce one lesson we've talked about repeatedly in the Lab:

Technical hints are interesting. Confirmation is what pays.

Bullish divergences are beginning to appear across several metals. That's worth noting, but until price confirms those signals with actual breakouts and daily closes above key resistance levels, they remain potential opportunities - not actionable evidence.

And in trading, that distinction often makes all the difference.

Stay patient, respect the levels, and let confirmation lead the way.