Analys från DailyFX

Silver Price Action First and Foremost, USD Secondary

Published

9 år ago

17 november, 2016

DailyFX

What’s inside:

Silver remains capped by resistance
Will we see a redux of October and how silver and the dollar played out?
Focus is on silver first, dollar second; short-term trend-line becoming a focal point for execution

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The price of silver remains contained in the low 17s, respecting resistance between June and October. As we said the other day, if silver continues to hang out below resistance, with another round of selling, there isn’t anything to the left on the chart until around the 16 level.

Even if the June/October resistance level is to be reclaimed, there is overhead supply to be cleared before silver can gain traction. The bottom and top-side of the October triangle in the 17.30/90 vicinity lies in the way.

A question some might be asking, are we in for a redux of October in respect to how the dollar and silver play with another? During that period, after plunging nearly $3, silver went on to form a triangle below resistance while the dollar kept on rallying. The eventual outcome was an upward break in silver and drop in the dollar.

The 21-day correlation between silver and the dollar is back below -80%, a strong reading. It could stay this way for an extended period of time as it often times does, or the relationship between the precious metal and currency could come back in line without warning. Correlations, in our view, are best viewed secondary given this on-and-off relationship. Through much of October while the dollar rallied sharply, silver was sharply unchanged. All it took was a solid dollar sell-off to spur silver out of the multi-week triangle. Which brings up a point worth making: One didn’t even need to know what the correlation was with the triangle in place to provide guidance (go with the break).

With that said, our focus is on silver first, dollar second. If we see bottoming-type price action in silver and the dollar continues to rally, perhaps we will be in for another replay of the period we just went through. Conversely, the dollar (DXY) could decline from over the 100 level (13-yr highs) while silver sits dead-in-the-water. This would suggest market participants don’t care about the dollar. In any event, we will run with what silver is telling us first and take the relative performance into consideration on a secondary basis.

Silver/USD: Daily

Created with Tradingview

Looking at silver in a bubble, a little closer. There is a short-term trend-line forming off the 11/14 low, most visible on intra-day time-frames. This development comes as price struggles at daily resistance. For those looking to establish a short position, waiting for a break of the trend-line is a prudent approach. The more touches the trend-line receives, the more important it will become. A break right now wouldn’t be as meaningful as a breach following a few more inflection points. As long as the trend-line holds a series of higher lows will continue to form, also giving us reason not to be aggressively short until a break occurs. For those looking for recent lows to hold, keeping this trend-line in mind will be helpful in working a long-biased game-plan.

All-in-all, we maintain our outlook that current price action is corrective in nature and at some point sellers will show up again. The eventual target on further weakness remains the 16/15.80 area. As always, it will all boil down to execution. The groundwork is being laid.

Silver: 60-minute

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—Written by Paul Robinson, Market Analyst

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Analys från DailyFX

EURUSD Weekly Technical Analysis: New Month, More Weakness

Published

8 år ago

30 september, 2017

DailyFX

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.

Analys från DailyFX

Euro Bias Mixed Heading into October, Q4’17

Published

8 år ago

29 september, 2017

DailyFX

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

Published

8 år ago

29 september, 2017

DailyFX

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

To be added to Christopher’s e-mail distribution list, please fill out this form