Analys från DailyFX
Gold Price Spike Drives Silver into Support, Rebound Underway
What’s inside:
- Gold spikes low on “fat finger”, tags 200-day MA almost to the tick
- Silver follows suit, dumps into two trend-lines before reversing
- Bias skewed higher as long as yesterday’s lows hold
What’s driving precious metals besides ”fat fingers”? Find out in our market forecasts.
Yesterday, gold was rocked by nearly $18 in a minute on a “fat finger” order, or an order which was erroneously larger than intended. So, they say. You look around and no one really knows exactly what caused it, and we’re not really sure it matters all that much. What matters on this end is that it took the price of gold right down to the 200-day MA almost to the tick before snapping back. The low very nearly came at trend-line extending back to January, as well. These spike-lows, regardless of what caused them, are important events, even if the influence is only short-term in nature. With that in mind, look for gold to hold the confluence of the 200-day and January trend-line.
But where can gold go from here if support holds? It won’t be long before the 1260s come into play with a little strength. It very nearly traded there prior to yesterday’s drop. It’s an area of interest which has been in play since February. For gold to really gain traction, as we’ve discussed before, it needs a strong weekly close above the 2011 trend-line before we can start getting serious about longs. Until then gold could flounder around.
Gold: Daily
Moving on to silver.
It was pushed down into a pair of trend-lines extending higher from December of both 2015 and 2016 before reversing most of its losses. The reversal-day at support skews the bias upward for now as long as yesterday’s low holds. We might see a retest of the reversal-day event, but a turn higher following a retest could offer traders an attractive opportunity to enter for a rebound. Keep an eye on gold, though, should it start pushing into the 1260s. With silver not having the cleanest top-side levels to operate off of we’re looking to gold for cues. The next real point of interest from a resistance standpoint in silver, is the trend-line running down off the April high, but it seems unlikely to reach that high if gold struggles to overcome the 1260s.
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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