Analys från DailyFX
Silver Price Decline Brings Long-term Levels into View
What’s inside:
- Silver price on the verge of lower low from May towards December low, long-term trend-line
- A number of resistance points on a bounce presents spot of interest for sellers
- Thin holiday trade in U.S.; FOMC minutes tomorrow, U.S. jobs report on Friday
What factors are anticipated to drive precious metals in Q3? Find out in our Trading Forecasts.
A week ago, when we last discussed silver prices we were looking for a potential rebound to continue following the spike and recovery on the “fat finger” trade in gold. At that time, we viewed taking out the spike-day low as our cue to abandon any type of bullish bias built-in off trend-line support extending higher from December of 2015 2016. Yesterday’s sell-off pushed silver through both the June 26 low, as well as the confluence of December trend-lines. With a little more selling we’ll see a lower low carve itself out from May. This could clear a path towards the December low at 15.64.
Whether a bounce develops here around the May low or following a drop below it, a run higher will quickly find silver in a thicket of resistance. The under-side of the broken December trend-lines, the spike-day low at 16.28, and the June trend-line all fall in a relatively small price zone of approximately 16.24/50. A bounce into this area and turn lower in momentum offers an attractive opportunity to join the path of least resistance and a move towards 15.64 or worse. Below the December low support will arrive in the vicinity of 14.90/55, horizontal levels from December 2015 to April 2016. Also in that area lies a very important long-term trend-line extending higher from 2003 under the 2008 and 2015 lows. A big test with big-picture ramifications could soon be upon us.
Looking higher from here, even if we are to see a strong push beyond noted resistance, silver will still have a lot of work to do to turn the general bias from bearish to bullish.
Short-term volatility could be on its way. Today is Independence Day in the U.S., so market participation is on the light-side with the major exchanges in the U.S. closed. The rest of the week could be an interesting one, though, with June FOMC minutes due out tomorrow and on Friday we have the June U.S. jobs report.
Silver: Daily
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—Written by Paul Robinson, Market Analyst
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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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