Analys från DailyFX
Silver Price Outlook Hinges on How Gold Handles Major Level
What’s inside:
- Silver putting in a lot of time around the 200-day MA
- Channel keeping both silver and gold prices pointed higher
- Gold struggling to overcome twin peaks from spring, 1300
Find out what fundamental factors are driving Gold Silver in our Q3 Forecast.
The last time we discussed silver prices, we were looking at the rising channel and keeping an eye out on how gold handles itself now that it had crossed the widely-watched 2011 trend-line. Silver continues to maintain the rising channel (gold too) and despite last week’s key reversal-day we’ll continue to respect the lower parallel for as long as it holds. There has been a lot of ‘play’ around the 200-day MA, with several days failing to close above (only twice it has, fractionally) during the past couple of weeks. We are definitely seeing this moving average exert its influence. If silver can free itself from the 200-day, a break to the 8/18 high at 17.32 can unfold, which depending on the timing may be in confluence with the trend-line running down off the July 2016 high.
Silver: Daily
Gold crossed the long-standing 2011 trend-line on a weekly closing basis not long ago, which helped further bolster the bullish case. But it still has work to do. The double-top from the spring is presenting problems; a solid key reversal-day bar was formed on 8/18 on an attempt to break above and also clear into the 1300s. The rejection has put the advance on ice for now. Like silver, gold has a clean rising channel (actually it’s cleaner) which is keeping it guided higher. Between resistance and support both close at hand, we have a situation where one side of the market is poised to ‘win’. A clean close above 1300 and the reversal-day high would clear a path towards higher prices, and with that bring silver along for the ride.
Gold: Daily
The key event of the week comes tomorrow when Fed Chairwoman Janet Yellen speaks at 14:00 GMT time in Jackson Hole. It’s certainly possible she moves the market materially, but it could also turn out to be a non-event. With that said, traders should be prepared either way.
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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
—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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