Market Outlook #80 - Double Barrel

This blog references an opinion and is for entertainment and informational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

In this special 'Double Barrel' edition of the 80th Market Outlook here at Ostium Insights, we'll be taking a look at the week ahead in markets, looking at price-action, positioning and event risk for SPX, EURUSD, Bitcoin, Gold and Brent Crude.

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Let's first take a look at the moderately busy macroeconomic calendar for the week ahead, with the primary focus being on inflation data and the Trump-Iran deadline:

TUESDAY: US DURABLE GOODS ORDERS (FEB): (CONSENSUS -0.5% VS PREVIOUS 0%)

TUESDAY: VARIOUS FED SPEECHES

TUESDAY: TRUMP-IRAN DEADLINE

WEDNESDAY: RBNZ INTEREST RATE DECISION: (CONSENSUS 2.25% VS PREVIOUS 2.25%)

WEDNESDAY: VARIOUS FED SPEECHES

WEDNESDAY: FOMC MINUTES

THURSDAY: US INITIAL JOBLESS CLAIMS: (CONSENSUS 209K VS PREVIOUS 202K)

THURSDAY: US CORE PERSONAL CONSUMPTION EXPENDITURES (YOY) (FEB): (CONSENSUS 3% VS PREVIOUS 3.1%)

FRIDAY: US CONSUMER PRICE INDEX (YOY) (MAR): (CONSENSUS 3.3% VS PREVIOUS 2.4%)

FRIDAY: US CONSUMER PRICE INDEX EX FOOD AND ENERGY (YOY) (MAR): (CONSENSUS 2.7% VS PREVIOUS 2.5%)

Now, let's dig into asset-specific price-action for the week ahead, looking firstly at SPX:

SPX:

Price: $6621

Weekly:

Beginning with the weekly timeframe, we can see that price bounced last week off the confluence of the anchored VWAP from the April 2025 tariff lows and the 365d rolling VWAP, having marginally wicked below the prior weekly low then bounced and rallied into the weekly close, reclaiming $6520 as support. Despite that, price did still mark out a lower-high below the prior weekly high and held firm below the anchored VWAP from all-time highs, with weekly RSI now pushing back up against 50. This is kinda make or break for the index short-term, in my view, and with the Trump-Iran deadline looming and price now pressing up at last week's highs and below that anchored VWAP, if we reject here and break and close the week back below $6520, I think we take out last week's low and that is where we either form the durable low or we continue lower towards $6153 as the next major support level, though likely front-running that area. Acceptance above $6730 with weekly RSI back above 50 = the Iran bottom is in and we continue to fresh highs later this year from there, in my view. If we look back at October 2023, the pattern of price-action and momentum has been similar, particularly off the 365d rolling VWAP, but we would need to see that momentum persist this week into next with that push above $6730 in order for this to look like a plausible path forward. $6520 is the line in the sand this week for short-term bullishness.

Daily:

If we turn now to the daily, we can see that price wicked below the prior weekly low into $6320, bouncing marginally above the 360dMA and right at the 365d rolling VWAP, then closing immediately back above the anchored VWAP from the April 2025 lows. This is a gigantic area of support and the bounce last week cemented this as a must-defend area, where price rallied almost $300 off its first test and then consolidated below $6630 support turned resistance and the 30d rolling VWAP. We are sat right there now, with daily RSI also having pushed back up into the 50 area; again, if we are going to roll over, it will be from here and the next push lower will either form strong bullish divergence into major demand or will take the index down towards $6200. The distribution of probable outcomes here is very wide, so being extremely convinced of anything will likely get you slaughtered here, but if we can hold $6520 early this week and through the Trump-Iran deadline, thereby also holding well above last week's low, it feels as though the market will have exhausted itself to the downside on any further geopolitical headlines. What would then be needed to drive the index lower, in my view, would either be monetary policy response (knee-jerk hikes in response to inflation or a lack of willingness to cut in response to demand destruction) or from significant kinetic escalation.

EUR/USD:

Price: 1.1556

‍Weekly:

If we begin by looking at the weekly for EURUSD, we can see that price held reclaimed support last week at 1.1468 and failed to break lower, consolidating between that level and resistance at 1.164 below the anchored VWAP from the 2026 highs, with price then rejecting a breakout beyond the overhead cluster. We closed back near the weekly open, remaining sandwiched between these two massive levels, with no trade to be taken here until either side gives way, in my view. If we can accept above last week's high and confirm the trendline breakout (ideally with weekly RSI back above 50), I think we have favourable longs back towards range highs, with the 2025 high at 1.193 my major target in that scenario; conversely, if we break and close below last week's low, I think we can look for intraweek shorts into 1.1285, where I will be watching for bullish divergence to form before looking to pivot long again from that area. If we don't get that and 1.128ish fails to hold price, I think there's another 200 pips of downside form there before major support around 1.103.

Daily:

Turning to the daily, we can see that price is consolidating right up against resistance, marking out higher-lows as it does so, with daily RSI sat right below 50, stubbornly failing to break back above that area. This is not too dissimilar from the momentum setup for SPX, and should EURUSD close above 1.163 with daily RSI back above 50, I think we look to long intraday pullbacks towards 1.159/1.16 with 1.147 as invalidation and 1.1844 as TP1, with 1.193 TP2 above that. I don' think the yearly open will provide much resistance to be honest if we're setting up to break out here, but obviously if we get the long trigger and then we deviate that YO and break down, we can re-assess. On the flip side, if we break and close below 1.147 this week, I think we could capture near-200 pips of downside towards 1.129, with 1.159 as invalidation on that, though I'd be looking for a tighter stop as structure develops later this week. Let's see how things go amidst all the headline chaos...

Bitcoin:

Price: $68,250

‍Weekly:

Beginning with BTC/USD on the weekly, we can see that price consolidated last week within the prior weekly range, bouncing off the weekly open at the March open of $65.8k and pushing back towards $70k resistance, below which it closed. We do have an inside week formation here, where early price action this week has swept that weekly high into $70k and rejected, thus opening up the possibility of inside week failure should we now close back inside last week's range. If we do, I would see shorts as favourable for the subsequent week, expecting price to take out all those flat lows into $65.8k next week before the real move begins, whether that is to continue lower towards $56.5k to test that major demand at the anchored VWAP from the prior bear market bottom, or to print some sort of bear trap into $65k and then reverse out of it back above $70k. If we close this week above $70k, I think we retest trendline resistance from the all-time high, as well as that support turned resistance at $76.4k, above which I would see clear skies for a much larger rally into the anchored VWAP from all-time highs, now sat around $85k. Those who continue to read my stuff on here and on X will know that much lined up on that wick into $60k that was historic in its extremity; whilst we can absolutely take out that low (and below $65k that becomes very probable), I do firmly believe the bulk of the downside is exhausted here for Bitcoin and time capitulation is what we are experiencing. I think the $57-58k region is as low as we'll get for this bear market, to be clear.

Daily:

Turning to the daily, we can see that structure is very choppy here, much like the previous range above $78k into $99k, but price is so far holding support much better than during that range, where rejection from the 30d rolling VWAP after deviating above the 90d rolling VWAP took price all the way through its prior wick lows into a major leg lower. This is why I am looking at that $65.8k support with keen eyes: close below that and we likely see another puke into that $60k wick, but I think the demand below that level is likely to be much more significant than the demand was at ~$80k; if we wick below $65.8k and then reverse and close above $70k (or just do the latter part of that), accepting above the 30d rolling VWAP, then this is very much not like last time, and I would expect $74k to be tagged shortly after, where the reaction will be telling as to whether we really have juice for a major bottom being in already or whether we just keep chopping around inside this range.

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Gold:

Price: $4668

Weekly:

If we begin by looking at Gold on the weekly, we can see that price bounced off support at $4495 last week and rallied towards $4900 as anticipated, wicking towards that support turned resistance but rejecting below it to close near $4640. We are very much in no man's land here, with longs not favourable unless we puke back towards the 365d rolling VWAP or accept above $5000, and shorts not favourable unless we spike into $5000 and see some lower timeframe trend exhaustion and then a breakdown, in which case I would be hitting the ask with the force of Thor's hammer. Until either of those scenarios begins to make itself known, let's not piss around in the mid-range. I do think the more likely scenario here is another squeeze into and above $4900 but rejection there and another test of ~$4200, likely front-running that area and beginning to mark out a higher-low over the coming weeks from which we continue to consolidate (and re-accumulate) inside this major range. Only on acceptance below $4200 does this really look cooked - in that scenario, we'd be looking at continuation lower back into $3500 and likely many further months of consolidation down there before this takes another stab at a run-up.

Daily:

Dropping into the daily, we can see that daily RSI has pushed back into the 50 level - and again this is something we can pay attention to (as with many assets at the moment), given that price is coiling beneath major resistance at the same time. Acceptance back above the 90d rolling VWAP, anchored VWAP from all-time highs and prior support turned resistance at $4900 with daily RSI cracking back above 50 and holding above it would be bullish Gold, and we could look for a return at least towards the $5418 all-time high daily close for a retest. Until then, a pop up into that area followed by a breakdown with daily RSI holding below 50 would suggest momentum is being exhausted here and we are likely to move lower again, with $4326 as the major downside target should we see some lower timeframe structure develop that gives us a short trigger. For now, just paying attention and not jumping into anything...

Brent Crude:

Price: $110.51

Weekly:

Beginning with the weekly timeframe for Brent Crude, we can see that last week saw price wick lower but hold another higher-low above $98.48, confirming prior resistance as major support at $96ish. Price bounced hard off that level and closed the week nearer $109, around which it is now consolidating, having wicked higher into $117 last week but failing to break the yearly highs. I would expect to see those highs swept this week, where should we wick above $120 towards $125 and reject and close he week back below $117, that would look very bull trappy into historical resistance and we could look for shorts next week back towards the $98 retest. If, instead, we finally accept above $120 and flip that level into support this week, I think we take out the 2022 highs at $134 next, where we could look for a pullback into $117 to long towards those highs, assuming we get some sort of lower timeframe structure that presents a better invalidation than $98.

Daily:

Turning finally to the daily, we can see that price has been choppy as it gets but ultimately building out this higher-high and higher-low grind with bearish divergences building up. In a strong trend, we expect these divergences to fail and be invalidated, and given price is continuing to hold above major support levels and coiling below resistance, perhaps this is what we are about to see, where a push through $120 leads to a momentum breakout back above 70 on daily RSI, marking out a higher-high vs the more recent lower-high and opening up another leg higher in price propelled by growing momentum. If, instead, we take out the yearly highs and fail, breaking lower with bearish divergence locked in, that's a very strong short setup with a clean invalidation, where I would expect all of these recent lows into $96ish to be cleaned up, but, to be honest, likelier still that a major top is in for Brent in that scenario. Playing it forward, acceptance above $120 with daily RSI above 70 = another leg higher is very likely and we want longs into and through $133; failing above $120 and breaking down with daily RSI back below 50 = $96 lows get taken out and price likely breaks and closes back below that major support, leading to a momentum breakdown and further downside back towards $80 - the 365d rolling VWAP - over subsequent weeks. All to play for with another week of carnage already unfolding...

I hope you've found some value in the read this week - please RT, share, engage etc. if so!

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