Analys från DailyFX
Silver Price Rallying into Resistance, Watching ST Channel for Guidance
What’s inside:
- Silver working its way into resistance
- Watching for signs of rejection…
- …and a break of the rising channel
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The bounce in precious metals continues from oversold conditions, with silver now having taken back the last leg lower following the break of the March low. It was a vicious three week rout, a snapback was to be expected.
The first line of potential resistance we had penciled in was the broken January 2016 trend-line, which brought in no selling interest, and not all that surprising given how close it was to the recent low. This brings us to the point we’re at now, which is around the March low – it’s a good spot to watch for sellers to step in. Ideally, in the next day or so we see a turn lower from here for a possible re-entry into a short trade.
If there is no response around current levels, then we will need to turn our focus to the next line of resistance just above at the July trend-line. It’s a trend-line which is quickly losing its influence (hence dotted out on the chart), and if we don’t see silver have any reaction around this line we will likely remove it from the chart (the slope could very well be played out). The line which may draw some interest, though, is the January/March trend-line near the 17.10 mark. Should we see a really aggressive bounce the 200-day at 17.64 could come into play, but if silver is to make a run at the December low then it seems unlikely a rally will develop to that point.
Daily
So, we have inflection points to operate off of on the daily chart, but the current bounce is also playing out in the form of a well-defined rising channel; this can be used to help us better time any turn which may soon take shape. Whether it’s used as a potential exit sign for longs or entry sign for shorts. A rejection at resistance and break of the bottom-side trend-line would be a solid sign of momentum turning back towards the broader trend lower.
Hourly
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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.
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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
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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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