The stock market ended higher last week based in part on macroeconomic themes including a new trade deal confirmation and a win for British conservatives, as I pointed out in the latest Market Week show. The S&P 500 (SPX) rose 23 points to 3169, an increase of 0.7%.

The US and Chinese governments again confirmed they reached a phase 1 trade deal, but notably it has not yet been signed. And Boris Johnson’s Conservative Party won 56% of seats in the UK parliamentary election, which will likely lead to the UK pulling out of the European Union.

S&P 500 (SPX) Daily Chart

Our approach to technical analysis uses market cycles to project price action. Our analysis is for a down week in the S&P 500, as it approaches a minor and brief corrective phase. Our price target is defined by its minor support zone between 3115-3140.

Let’s also take a look at the US dollar index, which fell 0.5% last week and more importantly broke down from the channel in which it had been trading.

US Dollar Index Futures (/DX) Weekly Chart

The dollar index is in the corrective phase of its current market cycle. It has begun a minor rebound, which is likely to fail 97.25 to 97.50, as the overall patterns indicate a period of high risk for the dollar moving forward.

For a more detailed analysis of both of these charts, check out the latest episode of the askSlim Market Week show.