Analys från DailyFX
Silver Price Action Yet to Confirm End of Bounce, but Soon Could
What’s inside:
- Silver price action has not confirmed the end of the correction
- There are levels which could see silver stall, watch price action around them
- 2003 trend-line viewed as major target
What important factors are expected to impact Precious Metals in Q3? Find out here!
Precious metals continue to bounce with the help of a very weak US dollar, but looking at silver price action the feeling on this end is that it’s still corrective in nature and that we have yet to see the worst levels before a meaningful low can form. Lower lows (LL) and lower highs (LH) are still very clear.
We were looking at a confluence of horizontal and trend-line resistance as a potential capper on the bounce, but the market wasn’t showing a bearish response. Price action at levels is key – does the market respond to it or not? That is, does momentum turn once a certain level is met. So far, we have not seen that happen, and so while the current rally appears to be a counter-trend move which will dissipate and turn lower, we need to wait for price action to tell us when that time may have arrived. (Price action at price levels is a facet to my analysis discussed routinely in webinars.)
What’s a potential road-blocker now? The lowest closing prints from last month are currently being tested around the 16.40 mark. A turn lower from here or even a drive higher through resistance and failure to hold above on a daily closing basis (forming a key reversal bar) would constitute the price action we are looking for. If, however, silver continues to travel higher we may have to wait for the bounce to fizzle out at the trend-line running down off the April high, which could come into confluence with a swing high created towards the very end of last month.
In either event, should we see silver turn lower we are still targeting the 2003 trend-line near the 14.85 mark. It’s at that point we might be in for a very sizable rally. For now, though, we’ll continue to focus on finding a spot to join the broader trend lower.
Silver futures: 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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