Analys från DailyFX
Gold Looking to Put LT Trend-line in Rearview Mirror, Silver to Follow
What’s inside:
- Gold trading above 2011 trend-line, looking for it to maintain on a weekly closing basis
- If it does – 2016 highs targeted, silver to follow
- Silver trading in confines of bullish channel, July trend-line next up as resistance
What’s driving precious metals? Find out in our market forecasts.
What a difference a few days makes. This is what we had to say regarding the price of gold on Thursday: “With gold currently trading right around this line [2011 trend-line], we’ll first respect it for what it is until broken –major resistance.”
Weaker than expected NFPs (+138k vs +182k exp.) undermined the US dollar, boosted precious metals. The resulting move in gold pushed it to just a shade above the 2011 trend-line to finish out last week. It’s a huge point of interest given how influential it’s been as resistance, especially in the past year. In light of the long-term nature of the trend-line, in our book, it’s about a decisive weekly close above the trend-line which is what’s needed to confirm as a true break. There is still plenty of time left in the week and events (ECB, UK election) which could ignite a move in either direction. But if we get that solid weekly close beyond the long-term hurdle by the close on Friday, then focus will shift towards seeing a move towards the 2016 highs to begin with. The April high around 1295 is another hurdle for gold to overcome (currently challenging it), but unlikely to present much of a problem as long as price stays above the 2011 trend-line.
Gold: Weekly
Daily
As we’ve been discussing, were operating off the technical landscape in gold for cues as to what to expect from silver. The picture hasn’t been as clear. But if gold is set to rise significantly silver won’t be left behind. Since bottoming in the early part of May, a channel has developed which is keeping the metal pointed higher. A noteworthy development. Silver has a trend-line of interest coming up not too much further above via a line running down off the July spike-high passing over the April peak.
Silver: 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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