Analys från DailyFX
Gold Prices Bounce Off of Higher-Low
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Talking Points:
– Gold Technical Strategy: Longer-Term bearish, Short-term bullish.
– Gold prices have continued the bullish May run, but a big zone of potential resistance looms ahead.
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In our last article, we looked at the recent bullish trend in Gold prices after price action had retraced down to a key Fibonacci level around the $1,250 zone of support. As we moved into last week’s close, Gold prices caught a bid to ascend to another fresh near-term high; and as we opened into this week, buyers drove prices up to yet another new high before a retracement came-in.
But shortly after that retracement started, buyers showed up to offer another element of support; giving us a near-term higher-low in Gold prices, which happens to reside around a prior area of swing-high resistance around $1,259 (as well as the 50% retracement of the most recent bullish move).
Chart prepared by James Stanley
This leaves near-term Gold prices in a bullish position, and traders executing near-term strategies can look for bullish continuation of the trend that had started earlier in May and has now seen over $40 tacked on to Gold prices over the month. Traders would likely want to look at targets on long positions around $1,273-$1,279.
Within this zone of potential resistance from $1,273-$1,279 is a batch of resistance that has both a trend-line projection from a longer-term bearish channel, as well as a key Fibonacci level of the longer-term bearish move. A subsequent re-test of this trend-line will likely bring a pause in the up-trend, at a minimum, and this could be an ideal area to plan for profit targets on long positions. Should resistance begin to hold around this trend-line projection, the door could be opened to bearish reversal plays given that risk can be controlled with a relatively tight stop.
Chart prepared by James Stanley
— Written by James Stanley, Strategist for DailyFX.com
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What’s inside:
- EURUSD broke the ‘neckline’ of a bearish ‘head-and-shoulders’ pattern, April trend-line
- Resistance in vicinity of 11825/80 likely to keep a lid on further strength
- Targeting the low to mid-11600s with more selling
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Coming into last week we pointed out the likelihood of finally seeing a resolution of the range EURUSD had been stuck in for the past few weeks, and one of the outcomes we made note of as a possibility was for the triggering of a ’head-and-shoulders’ pattern. Indeed, we saw a break of the ’neckline’ along with a drop below the April trend-line. This led to decent selling before a minor bounce took shape during the latter part of last week.
Looking ahead to next week the euro is set up for further losses as the path of least resistance has turned lower. Looking to a capper on any further strength there is resistance in the 11825-11880 area (old support becomes new resistance). As long as the euro stays below this area a downward bias will remain firmly intact.
Looking lower towards support eyes will be on the August low at 11662 and the 2016 high of 11616, of which the latter just happens to align almost precisely with the measured move target of the ‘head-and-shoulders’ pattern (determined by subtracting the height of the pattern from the neckline).
Bottom line: Shorts look set to have the upperhand as a fresh month gets underway as long as the euro remains capped by resistance. On weakness, we’ll be watching how the euro responds to a drop into support levels.
For a longer-term outlook on EURUSD, check out the just released Q4 Forecast.
EURUSD: Daily
—Written by Paul Robinson, Market Analyst
You can receive Paul’s analysis directly via email bysigning up here.
You can follow Paul on Twitter at@PaulRobinonFX.
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EURUSD: Retail trader data shows 37.3% of traders are net-long with the ratio of traders short to long at 1.68 to 1. In fact, traders have remained net-short since Apr 18 when EURUSD traded near 1.07831; price has moved 9.6% higher since then. The number of traders net-long is 15.4% lower than yesterday and 16.4% higher from last week, while the number of traders net-short is 0.4% higher than yesterday and 10.5% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EURUSD prices may continue to rise. Positioning is more net-short than yesterday but less net-short from last week. The combination of current sentiment and recent changes gives us a further mixed EURUSD trading bias.
— Written by Christopher Vecchio, CFA, Senior Currency Strategist
To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com
Follow him on Twitter at @CVecchioFX
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Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.
GBPUSD: Retail trader data shows 38.2% of traders are net-long with the ratio of traders short to long at 1.62 to 1. In fact, traders have remained net-short since Sep 05 when GBPUSD traded near 1.29615; price has moved 3.4% higher since then. The number of traders net-long is 0.1% higher than yesterday and 13.4% higher from last week, while the number of traders net-short is 10.6% lower than yesterday and 18.3% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBPUSD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current GBPUSD price trend may soon reverse lower despite the fact traders remain net-short.
— Written by Christopher Vecchio, CFA, Senior Currency Strategist
To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com
Follow him on Twitter at @CVecchioFX
To be added to Christopher’s e-mail distribution list, please fill out this form
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