Analys från DailyFX
Gold Prices Crushed After NFP Beats Expectations
Talking Points:
– Gold technical strategy: Long-term mixed, Intermediate-term bearish, short-term bearish.
– IG Client Sentiment is currently showing +4.74 traders long for every one short, and given retail sentiment’s contrarian nature, this is bearish.
– Q3 Forecasts have just been released and are available in our Trading Guides. And if you’re looking for something more interactive in nature, please check out our DailyFX Live webinars.
To receive James Stanley’s Analysis directly via email, please sign up here.
On Wednesday, we looked at the continuation of the bearish move in Gold prices after support had begun to show at a key Fibonacci level around the $1,219 zone. But as we warned, the bearish move had shown considerable aggression at that point, and rather than using that support level to stage bullish reversal approaches, traders would likely want to wait for some element of short-term resistance to come into play before looking to add short exposure to Gold. The ‘R1’ level that we were looking at for the first potential barrier of ‘lower-high’ resistance has come into play twice since that article, with sellers responding in each instance.
The most recent of these tests took place shortly after this morning’s Non-Farm Payrolls report was released. The Dollar posed an impulsive trend-side move as the report was filtering into markets, and this created a quick spike-higher in Gold prices. But as Dollar strength began to show, Gold prices tipped-lower and prices were offered below a number of support levels, including the Fibonacci support that had previously helped to hold-up price.
Gold Prices Breaking Below Fibonacci Support (One-Hour Chart)
Chart prepared by James Stanley
This support break puts longer-term Gold charts in a fairly precarious position. We’ve now traded below the prior May lows, and given the strength of the fundamental drivers behind the move, it’s still rather difficult to project that a low may be in play anytime soon. There is a very interesting level at the psychologically-important $1,200-handle. This is the 38.2% retracement of the ‘lifetime move’ in Gold prices, taking the Bretton Woods fix of $35/oz up to the 2011 high of $1,920.80. Perhaps more important than just a theoretical basis – this zone had helped to catch the lows in Gold prices in March, right around the Fed’s rate hike.
Gold Prices Daily Chart – Emphasis on Longer-Term Fibonacci Support at $1,200
Chart prepared by James Stanley
Despite the fact that this longer-term support level could open the door to bullish reversal strategies, traders would likely want to tread carefully here, as little has been unable to inspire strength in Gold prices of late. Gold prices have been dropping while the Dollar has been strong, and they’ve been dropping while the Dollar has been weak; highlighting the fact that what we’re seeing here is likely being driven by a shift around growth and rate expectations. And given that we’re looking at a set of extended comments and interviews with Chair Yellen’s Humphrey Hawkins testimony on Wednesday and Thursday of next week, and there is certainly opportunity for trend-side continuation.
Ahead of that testimony, we will likely see markets attempting to position-in, and traders looking for bearish exposure in Gold can re-assign that prior support level as potential resistance for short-side continuation approaches. Below, we’re looking at three potential resistance areas that can be used for such a purpose, including our prior level of Fibonacci support as ‘R1’.
Gold Prices Hourly Chart With Potential Resistance Levels Applied
Chart prepared by James Stanley
— Written by James Stanley, Strategist for DailyFX.com
To receive James Stanley’s analysis directly via email, please SIGN UP HERE
Contact and follow James on Twitter: @JStanleyFX
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
Confidence is essential to successful trading, see this new guide – ’Building Confidence in Trading’.
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
- Crude oil comment: US inventories remain well below averages despite yesterday’s build
- China is turning the corner and oil sentiment will likely turn with it
- Crude oil comment: Europe’s largest oil field halted – driving prices higher
- Crude oil comment: Mixed U.S. data skews bearish – prices respond accordingly
- Crude oil comment: Fundamentals back in focus, with OPEC+ strategy crucial for price direction
-
Analys från DailyFX9 år ago
EUR/USD Flirts with Monthly Close Under 30 Year Trendline
-
Marknadsnyheter2 år agoUpptäck de bästa verktygen för att analysera Bitcoin!
-
Marknadsnyheter4 år ago
BrainCool AB (publ): erhåller bidrag (grant) om 0,9 MSEK från Vinnova för bolagets projekt inom behandling av covid-19 patienter med hög feber
-
Analys från DailyFX11 år ago
Japanese Yen Breakout or Fakeout? ZAR/JPY May Provide the Answer
-
Analys från DailyFX11 år ago
Price & Time: Key Levels to Watch in the Aftermath of NFP
-
Marknadsnyheter1 år agoDärför föredrar svenska spelare att spela via mobiltelefonen
-
Analys från DailyFX7 år ago
Gold Prices Falter at Resistance: Is the Bullish Run Finished?
-
Nyheter6 år agoTeknisk analys med Martin Hallström och Nils Brobacke