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Oct 20, 2025

XAU/USD chart on the weekly time frame

XAU/USD chart on the weekly time frame

Gold extended its bullish trajectory for a ninth consecutive week; however, the most recent trading session provided critical technical signals suggesting a potential culmination of the trend. 

The weekly close marked the sixth instance of price action outside the upper Bollinger Band, a statistically extreme event that historically signals an overextended market and elevates the probability of a medium-term correction. This is corroborated by oscillators, specifically the Relative Strength Index (RSI), which have ascended to record overbought levels, indicating diminishing bullish momentum. 

The most significant development was the emergence of an opening gap on Friday. Following an extended rally, such a gap is interpreted as an exhaustion gap, typically indicative of a final thrust before trend reversal. This interpretation was promptly validated within the same session, as prices subsequently faced significant selling pressure, erasing approximately $200 of value before a modest recovery in the final hour. 

Consequently, while previous advisories recommended partial profit-taking, the confluence of these signals now warrants a more defensive posture, specifically a "sell-on-rally" strategy. 

Based on this technical structure, a corrective decline of approximately 10% is projected over the next quarter, with initial targets at $4,000, followed by $3,700.
EURUSD Chart on the weekly time frame

EURUSD Chart on the weekly time frame

EURUSD has maintained its consolidation within the established 1.1530-1.1830 range for a seventeenth consecutive week. 

The recent price action saw a successful test of the 1.1530 support level, from which the pair staged a recovery, albeit while surrendering nearly half of its intra-week gains during the final trading session. 

The medium-term directional bias remains neutral and is contingent upon a decisive daily close outside of this multi-week channel. 

Consequently, a neutral tactical stance is warranted until a confirmed breakout provides a more definitive directional signal.

Within the current confines, a range-trading strategy—initiating long positions near support and short positions near resistance—is applicable until such a breakout occurs.
USTEC chart on the weekly time frame

USTEC chart on the weekly time frame

The USTEC index demonstrated resilience last week, posting a stronger-than-anticipated recovery that countered the prior week's significant bearish engulfing candlestick pattern. 

Although the index has marginally surpassed the key resistance level near 24,800, its price action remains confined within a medium-term bearish megaphone chart formation. 

From a technical perspective, the high (25,195) and low (23,965) of the aforementioned bearish candle are identified as critical medium-term triggers. 

A decisive breach beyond either of these thresholds is expected to initiate a sustained directional move over subsequent weeks. 

Given the current market structure, where risk is assessed as substantially elevated relative to potential reward, a conservative stance is warranted. 

Consequently, it is recommended to maintain an underweight position in open exposures until more definitive technical signals emerge from the market.

 

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