Mid-Week Technical Outlook: Market Mashup

It is certainly shaping up to be another wild week for financial markets thanks to the US debt limit saga. The risk pendulum continues to swing back and forth on this major development with volatility expected to intensify as the so-called default X-date looms.

Markets could be injected with even more volatility thanks to geopolitical tensions, growth concerns, and more data from major economies. Later today, investors will direct their attention towards the minutes from the May FOMC meeting which could offer more clues about the central bank's next move.

Here are some technical setups to keep an eye on ahead of the Fed minutes.

Dollar holds firm

The dollar has been trading a little firmer despite the impasse in US debt-ceiling negotiations. Bulls seem to be drawing strength from hawkish Fed speakers and technical forces. Prices have turned bullish on the daily charts with support found at 103.00. The upside momentum has already taken prices towards 103.80 with 104.00 the next key level of interest.

EURUSD breakdown alert?

The EURUSD remains bearish on the daily charts with bears grinding down the 1.0760 support level. A solid daily close below this point could signal a decline toward 1.0686. Should bulls push back above 1.8110 – where the 100-day SMA resides, this could open a path back toward 1.0845 and 50-day SMA at 1.0900.

GBPUSD wobbles above 1.2370

Sterling seems to be under pressure despite the UK inflation figures printing higher than expected. A solid breakdown below the 1.2370 level could open a path toward 1.2280. Should 1.2370 prove to be reliable support, prices may rebound back toward 1.2550.

AUDUSD poised to sink further?

The AUDUSD has smashed into the 0.6570 support level. A breakdown below this point may see 0.6480. If bulls are able to defend 0.6570, prices could rebound toward 0.6630.

NZDUSD breaches key support

Our trade of the week (NZDUSD), tumbled this morning after the Reserve Bank of New Zealand hiked rates by 25 basis points and signalled that it could be done with rate hikes. Prices are trading below the 200-day SMA as of writing and could hit 0.6100 in the short term. Below this level may see the NZDUSD hit levels not seen since November 2022 around 0.6070.

USDJPY upwards and onwards

After creating a fresh higher low of around 137.40, USDJPY bulls continue to eye higher levels. Further upside could be expected if a solid daily close above 139.00 is achieved. If prices slip back below 137.40, tough support around the 200-day SMA may limit downside losses.

SPX500_m trapped in wide range.

The index remains trapped within a range with support at 4050 and resistance at 4200. A potent fundamental catalyst may be needed for prices to experience a bullish or bearish breakout.

Gold approaches 50-day SMA

Gold remains heavily influenced by fundamental forces. Prices are choppy and noisy on the daily timeframe. Should $1970 prove to be reliable support, the upside could take prices towards the 50-day SMA and psychological $2000 level. If prices dip back under $1970, gold may see $1945.

Dollar Federal Reserve EURUSD GBPUSD AUDUSD NZDUSD USDJPY Gold