Analys från DailyFX
Silver Price Bounce to Fail, Bringing 2003 Trend-line into Play
What’s inside:
- Silver undergoing what is viewed as corrective price action
- Looking for one more tradeable opportunity from the short-side
- Long-term trend-line sub-15 remains the objective on further weakness
What fundamental factors will drive precious metals in Q3? See our Quarterly Forecast.
The other day when we were discussing silver price, we were looking at the long-term trend-line extending higher from 2003 as our big down-side objective before seeing a bounce (perhaps a major low) develop. Obviously with the trend-line 14-years old it’s a big line of support, but we’re not there yet – and with that said there is still room to go lower in the near-term. This opens up a path for further declines to take advantage of as a short-term trader.
The decline off the June swing-high has been fairly orderly (for silver), aside from the ‘flash crash’ seen last Thursday during the Asia session. But even the ‘flash crash’ once the Comex broke the prints down in the low-14s wasn’t all that disorderly. In fact, as we noted the other day the move after the U.S. jobs report was just as large (both equated to roughly 60 cents of carnage).
We’ve seen one bounce already in the near-term downtrend turn lower and the bounce over the past few days, while a bit more powerful than the first bounce, still smacks of corrective price action, not of a low. We’re coming up on the low from May as resistance in addition to the trend-line off the June 6 peak. Depending on the timing of arrival, assuming silver extends a bit higher, the two lines of resistance could be confluence and offer traders a low-risk spot to join in for another more push lower.
One more decline appears to be in store before the 2003 trend-line is thoroughly tested; at which time if price action plays out in proper fashion we’ll look to reverse our short bias towards a recovery bounce at the least, if not a sustainable low for some time to come.
Silver Futures: Daily
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—Written by Paul Robinson, Market Analyst
You can receive Paul’s analysis directly via email by signing up here.
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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