Analys från DailyFX
Gold Price Pullback to Give Way to Fresh 2017 High in 2Q
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GOLD WEEKLY CHART
Trading View Chart Created by Michael Boutros, Currency Strategist with DailyFX.com
Last quarter we highlighted that gold prices had approached a“critical support confluence in late-December at 1220/30- a level defined by the 161.8% extension of the decline off the yearly highs, the 76.4% retracement of the advance off the 2015 low, the 2014 low and the lower parallel of the embedded descending parallel formation. Note that the lower-median-line parallel extending off the 2015 low comes in just below and the immediate downside bias is at risk into this key region.” That, in fact, turned out to be THE low in gold with prices ripping higher into the start of the year.
The precious metal up nearly 11% off the lows and more than 8.25% quarter-to-date, marking the largest quarterly advance since 1Q of last year (+16%). Note that 2016 saw two of the largest quarterly ranges in three years and when put in the broader context, this quarter remains well-within the confines of the 4Q trading range – as such, we may yet see some consolidation before the next big move, especially as prices target a key resistance confluence just higher at 1278/79.
GOLD DAILY CHART
Trading View Chart Created by Michael Boutros, Currency Strategist with DailyFX.com
A closer look at price action highlights near-term resistance at the 2017 high-day close at 1252– this level converges on a parallel extending off the August opening range lows (8/8) heading into the March close and is backed closely by the 200-day moving average. From a trading standpoint, the risk remains for a pullback off these levels into the start of the quarter but the broader outlook remains constructive while above the descending median-line (blue).
Ultimately we’ll be looking for a breach higher to target a critical resistance barrier at 1278/79 where the 100% extension of the advance converges on the 61.8% retracement of the decline off the 2016 high and slope resistance off the record 2011 highs- we’re likely to get a bigger reaction off this zone. Interim support rests at 1220 backed by 1193/99 with our bullish invalidation level set to 1176/80 – a region defined by the 61.8% retracement of the advance and the late-January lows. A break below this region would put the broader downtrend back in focus. Bottom line: game plan into 2Q is look for an early pullback to target a high deep in the quarter near the upper parallels.
Want to read the rest of this gold forecast? Get the full report here!
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
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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