After several sessions filled with strong technical signs, markets are now entering a moment of hesitation.
The dollar printed a bullish candlestick pattern, while gold and silver are hovering around key support zones that could determine whether the recent pullback evolves into a deeper correction… or simply remains a pause within a larger trend.
In other words, the technical setup looks promising in several places, but the market is still waiting for confirmation.
U.S. Dollar (DX.F)
Looking at the daily chart, we can see that yesterday’s session ended with a large white candle which, together with the small candle that preceded it, created a bullish engulfing pattern, which serves now as first support.
The session also closed above the January 20 gap, which means bears lost an important technical ally. To be even more precise, the close also landed slightly above the upper boundary of the orange gap from early December (99.21-99.30), removing yet another defensive line from the sellers’ playbook.
From a purely technical perspective, that’s a very positive development.
But - and this is a big but - the market quickly introduced some uncertainty.
Instead of immediate follow-through, today’s Asian session opened with a bearish gap (99.00-99.31). Although bulls attempted to close it during the following trading hours, the resistance has not been fully overcome yet and the dollar is still trading within the gap area, which does not look particularly bullish.
Adding to the caution, daily indicators are currently showing negative divergences and appear close to shifting in favor of the bears. Still, it’s too early to draw conclusions.
As always, the key factor will be the daily close.
If the gap remains open and the session ends with a bearish candle, the start of next week could be challenging for buyers. If, however, bulls regroup and manage to close the gap before the end of the session, the upside targets discussed in previous Lab Notes will quickly come back into play.
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Key Levels to Watch
Dollar
Resistance: 98.88-99.30
Support: 98.65 (bottom of yesterday’s bullish engulfing formation) / 98.33-98.50
Gold
Supports: (…)
Resistances: (…)
Silver
Supports: (…)
Resistances: (…)
Today’s Takeaway
Today’s market is sending a clear message: the direction is not decided yet, but the key battlefields are now clearly defined.
Here’s what traders should focus on:
Dollar: watch the 99.00-99.31 gap area and the resistance zone near 99.30. A daily close above it would confirm bullish momentum and revive upside targets from earlier Lab Notes. Failure to close the gap may invite another pullback.
Gold: the key battlefield (…)
Silver: the 8000 level (…)
Final Thought: at the moment the market is caught between bullish signals and unfinished technical battles, which means one thing: the most important price of the day will not be the intraday high or low - it will be the closing price.
Stay sharp, stay tactical and have a wonderful weekend!
Anna