Mid-Week Technical Outlook: Indices & Commodities

A sense of unease gripped financial markets on Wednesday as concerns over China’s growth outlook and sticky UK inflation data left investors on edge ahead of Jerome Powell’s testimony to Congress.

Market players are likely to adopt a guarded approach towards riskier assets amid the cautious mood, resulting in markets trading in tight ranges until a fresh catalyst is brought into the picture. As discussed throughout the week, Jerome Powell is widely expected to reiterate comments from his post-Fed meeting press conference, opening the doors to further rate hikes. If expectations match reality with fresh clues offered on rate hike timings, this could spark volatility across financial markets.

Here are some technical setups to keep an eye on this week:

SPX500_m under pressure

It has been a rough week for the SPX500_m thanks to the risk-off mood and overall caution. Bears seem to be on the prowl with prices slowly approaching the 4351 level. Although the trend still remains bullish on the daily charts, this outlook could be threatened if a solid breakdown and daily close below 4351 is achieved. Such a development could signal a further decline towards 4300. If prices are able to push beyond last week's high of 4451.5, the next key level can be found at 4500.

NQ100_m breakout pending?

The NQ100_m remains in an uptrend on the daily charts. There have been consistently higher highs and higher lows while prices are trading above the 200-, 100- and 50-day SMA. The price action over the past few days suggests that the index could be waiting for a fresh fundamental spark before embarking on its next move. A solid breakout above 15300 could trigger an incline towards levels not seen since January 2022 around 15700. Should prices remain trapped below 15300, this may see the index sink towards 14670.

STOX50 capped below 4430?

It has been a choppy affair for the STOX50 with prices trapped within a wide range. Strong resistance can be found at 4430 while support can be seen at 4280 and 4230. Should bears switch into higher gear, this may drag prices back toward the 100-day SMA at 4280 and lower. Alternatively, a breakout above 4430 could propel prices to levels not seen since mid-2007 around 4500.

UK100 breakout on horizon…

The UK100 could be gearing up for a major breakout as prices bounce with a tightening range on the daily charts. Support can be found just above the 200-day SMA at 7550 and resistance around 7650. Should prices break above 7650, this could encourage an incline towards 7690 and 7740, where the 100-day SMA can be found. A breakdown below 7550 could see prices sink towards 7440.

Crude rangebound…

Oil prices remain trapped within a range on the daily charts with support at $67.00 and resistance at $74.40. A solid daily close below $67.00 may open the doors toward $64.50. Should prices push above $74.00, this could encourage an incline toward $76.80.

Calm before gold storm?

Gold prices remain under pressure ahead of Jerome Powell’s two-day hearings before Congress which kicks off today. Despite trading within a range on the daily timeframe, the scales of power seem to be swinging in favour of gold bears. A breakdown below $1932 could open a path toward $1893. Alternatively, a rebound back above $1959 may see prices retest the $1985 resistance. Should prices break above $1985, the next key level of interest can be found at $2000.

Jerome Powell inflation Federal Reserve SPX500_m NQ100m EUROstoxx FTSE100 Crude Oil Gold SMA Technical Analysis