Analys från DailyFX
Silver Price Continues Higher in Channel, Has Eyes for April Highs
What’s inside:
- Silver price continues to ride higher within confines of a bullish channel
- It may pull back to alleviate short-term overbought conditions, but as long as the lower parallel holds…
- USD may find support here soon, but it may have minimal impact; sticking to technicals in precious metals as the main guide
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Silver remains trading within the confines of a bullish channel created after bottoming in July. Gold has been using a similar channel but has been the stronger of the two metals and is currently beyond the upper confines of it channel. Silver’s move above the July 2016 trend-line furthered it along with a resulting break above the June high at 17.74. Resistance has come and gone quickly, it’s been a healthy trend to be certain.
From here a pullback could develop off the upper parallel of the channel and alleviate short-term overbought conditions, but as long as the lower parallel holds then the broader outlook remains positive. The first support level to look to on a decline before reaching the lower parallel arrives at the June high (old resistance becomes new support).
On Monday, we took a look at the relationship between precious metals (namely gold) and the US dollar. The US Dollar Index (DXY) is currently trading just a hair beneath the low-end of the long-term support zone, but given it goes back to 1998 we’ll give it a little room before calling it a full break. A tradable low still looks to possibly be nearing. But even if this is the case, precious metals can still rally despite the generally negative relationship between these commodities and the dollar. Trading in tandem has happened on a few occasions this year and can happen again. With that in mind, even if the dollar does find buyers, as long as we see constructive price action in silver ( gold) the bias will be for higher prices. Again, we’ll continue to use the rising channel as our guide for as long as it lasts.
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Silver: Daily
—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.
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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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