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Silver Breaks Support, Gold Testing Prior Double-top

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What’s inside:

  • Silver furthers weakness on channel break below confluence of support
  • Gold treading precariously around April/June double-top, August consolidation period
  • Key levels and considerations outlined for both precious metals

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Earlier in the week we made note of the breakdown below key channel support in precious metals, highlighting that it signaled more weakness ahead. We’ll start out by looking at silver and then move onto to its big sibling, gold.

The break below the lower parallel was our initial cue that more selling was on the way, but an immediate point of hesitation came in with regard to shorts as a significant level of support was met immediately upon the breakdown. The area just above 17 has confluence through horizontal price support, the 200-day MA, and a retest of the July 2016 trend-line. It was nearly cracked on Wednesday with the help of a hawkish Fed, but it was yesterday where we got a solid closing print below noted support. (Support now becomes resistance.) This opens up a path towards 16.71, 16.56, and 16.09 in the near-term. The most latter level may be aggressive for short-term positions, but if gold gains momentum below 1290 it may be seen sooner rather than later.

Silver: Daily

Silver Breaks Support, Gold Testing Prior Double-top

Moving on to gold…

Upon the breaking of channel support gold didn’t have any immediate support until the 1296-region where the double-top was formed from April to June. It’s a steadfast area given the rejection and consolidation which took place there in August before eventually being overtaken. Yesterday brought a closing print below 1296, but came right around the closing highs seen during the aforementioned August consolidation period. If gold doesn’t get into gear quick-like, upon a break of 1290 look the recent decline from over 1350 to continue towards 1275, 1267, and with sellers piling in we could see the December trend-line tested closer to 1250. Depending on the timing, the 200-day MA may come into play around the trend-line.

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Gold: Daily

Silver Breaks Support, Gold Testing Prior Double-top

—Written by Paul Robinson, Market Analyst

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You can follow Paul on Twitter at @PaulRobinonFX.

Analys från DailyFX

EURUSD Weekly Technical Analysis: New Month, More Weakness

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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

EURUSD Weekly Technical Analysis: New Month, More Weakness

—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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Analys från DailyFX

Euro Bias Mixed Heading into October, Q4’17

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Euro Bias Mixed Heading into October, Q4'17

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

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Analys från DailyFX

British Pound Reversal Potential Persists Heading into New Quarter

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British Pound Reversal Potential Persists Heading into New Quarter

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

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