Analys från DailyFX
Silver Prices – Outlook Hinges on Nasty Weekly Rejection in Gold
What’s inside:
- Gold puts in a nasty reversal bar after trying to sustain above 2011 trend-line
- Silver broke month-long upward channel, could soon trade towards 16.25 if…
- Gold can’t hold intermediate-term support surrounding 1260
What’s driving precious metals? Find out in our market forecasts.
When we last took a look at gold and silver prices, the yellow metal was trading well above the 2011 trend-line on a daily closing basis, but not convincingly on a weekly basis. Given the duration of the trend-line and problems gold has had over the past year to cross above this all-important threshold, it’s the weekly close we want to see if we are to turn outright bullish on precious metals. Not only did gold fail to close solidly above, but a huge bearish rejection bar formed by week’s end. This shifts the focus back on intermediate-term support surrounding 1260. How it holds here will be key. A clean break into the 1250s will validate the rejection and clear the path of least resistance lower. If gold can maintain and work its way back above last week’s high (the April peak), then a constructive outlook will gain traction again.
Gold: Weekly
Daily
Looking to silver, last week’s break ripped through the lower parallel in place since the earlier-part of May. In terms of levels, silver still isn’t providing the same clarity as we are seeing in gold. One thing is for sure, it’s clearly the weaker of the two. With that in mind, should gold fold, silver is likely to take a sizable hit. There is a confluence of trend-lines extending higher from December of both 2015 and 2016. The area of confluence arrives around 16.25/15. If gold maintains support it’s presently testing, then silver will turn higher with it; but, again, at this time there isn’t the same clear-cut levels to operate off of as there is with gold. This keeps our attention more focused on gold price action.
Silver: Daily
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—Written by Paul Robinson, Market Analyst
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You can follow Paul on Twitter at @PaulRobinonFX.
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.
Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.
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
To be added to Christopher’s e-mail distribution list, please fill out this form
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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