Analys från DailyFX
Gold Price Breakout Fails at $1,300; Is the Bullish Move Finished?
Talking Points:
– Gold Prices remain bullish, but failure at the $1,300 psychological level highlights the potential for reversal.
– IG Client Sentiment for Gold is currently +1.58, as of this writing.
– If you’re looking for bigger picture analysis on Gold prices, please check out our Gold Forecast.
To receive James Stanley’s analysis directly via email, please SIGN UP HERE
In our last article, we looked at Gold prices approaching the key level of $1,296. This zone of resistance had twice reversed a bullish advance in Gold prices earlier in the year, and a double top had formed after the April and June bullish runs turned around at this level. As we were making a quick-advance higher as we came into last week, it seemed likely that another test of this key zone was in store; and after buyers were able to break out of that area of resistance, prices ran up to the key psychological level of $1,300.
Gold Daily: Fresh Post-Election Highs with Test of $1,300
Chart prepared by James Stanley
After $1,300 came into play on Friday morning, however, sellers began to take over; and brought prices lower by more than $20 off the highs. This would denote a false breakout at $1,300 after the successful bullish breakout at $1,296. After peaking-out at $1,300.83 on Friday morning, support showed-up at $1,280.23 to open this week, and this is near the 38.2% retracement of the most recent bullish move (shown in blue below), taking the low on August 8th up to the Friday morning high. As buyers have slowly begun to trickle back in, prices have lifted above the 23.6% of this move, and are now showing support at a prior area of resistance (shown in orange below).
Gold Hourly: Buyers Respond to 38.2% Support Test, Support at Prior Resistance (23.6%)
Chart prepared by James Stanley
As we approach a pivotal event on the calendar in the latter portion of this week with the start of the Jackson Hole Economic Symposium, there are potential setups on both sides of Gold at the moment. For the long side of Gold, traders will likely want to wait to let this area around $1,300 clear to ensure that bulls will be able to continue driving prices beyond this resistance. Around $1,307.50 is another potential resistance level, and this can be used to look for a deeper bullish move; should this level come into play, buyers can look to buy support at prior resistance (in the zone from $1,296-$1,300) with the aim of top-side continuation.
On the bearish side of Gold prices, a break below this week’s swing-low around $1,280 can open the door for a short-side setup with targets down to $1,276 and then $1,270. If the prior swing-low around $1,267 is taken-out, this opens the door for a deeper move towards the confluent zone around $1,250.
Gold Prices Four-Hour: V-Shaped Reversal Runs into Long-Term Resistance
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.
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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