The Pattern Pulse – 25 April 2024

Daily Timeframe –

The British pound versus the US dollar (GBP/USD) recently rebounded from a highlighted area of support at $1.2339ish (made up of an ascending line, taken from the low of $1.2037, channel support, drawn from the low of $1.2513, a 100% projection ratio at $1.2331 [AB=CD support] and a 78.6% Fibonacci retracement ratio at $1.2339). The aforementioned support zone was also reinforced by the Relative Strength Index (RSI), which simultaneously recorded an oversold signal.

Since shaking hands with support, price has already rallied circa 130 pips and has scope to extend recovery gains to as far north as resistance at $1.2527, a level closely accompanied by channel resistance, etched from a high of $1.2894.

Commodities: Silver Prices Rebounding from Harmonic Support
H4 Timeframe –

The price of spot silver versus the US dollar (XAG/USD) remains entrenched within a moderate uptrend. This tends to attract trend-following systems that attempt to buy breakouts of key areas of resistance and buy into corrections.

As evident from the H4 chart, price action has rebounded from an equal AB=CD harmonic formation at $26.79. Traders commonly enter long from the 100% projection ratio and position protective stop-loss orders beneath the 1.272% Fibonacci projection ratio ($26.19) and target the 38.2% and 61.8% Fibonacci retracement ratios derived from legs A-D ($27.87 and $28.60, respectively).

Equities: S&P 500 Touching Gloves with Key Support
Weekly Timeframe –

Following up on last week’s post, in which the FP Markets Research Team highlighted an ‘interesting support zone between the 5,000 level and a channel resistance-turned-potential support line taken from the high of 4,607’.

As illustrated on the chart, after three consecutive weeks in the red, bulls are beginning to make an appearance from the above-noted support area, with price action on track to pencil in a bullish harami candlestick formation. This candle pattern focuses on the candle’s real bodies and disregards the upper and lower shadows; once the candle has closed, traders tend to position buy stops beyond the high of the initial candle and position protective stop-loss orders below that same candle’s lower shadow.

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Publication date:

25 April 2024 - 12:47 (GMT)

Longer-term action, however, draws attention to the possibility of a bullish flag setting up between the all-time high of $73,845 and $60,717. We have already witnessed two tests of each descending line; therefore, the pattern is confirmed and ‘in play’. Another technical observation worth observing is the neighbouring support level drawn from $56,796, which could be an area where the chart welcomes dip-buy(ing within the pattern’s limits, in addition to the Relative Strength Index (RSI) closing in on trendline support, taken from the low of 23.71. Ultimately, though, chart pattern enthusiasts will want to see a close form above the upper boundary of the flag pattern before committing, and since this is a weekly chart, this could be a rather long wait. Time will tell!