Analys från DailyFX
Silver Price Technical Outlook: Easing into Support
What’s inside:
- Silver price is pulling back from upper parallel of channel in place since July
- Currently testing support by way of the June peak, lower parallel holds the real key
- Possible ‘fly in the ointment’ may be gold futures positioning, but letting price action dictate outlook
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Silver prices recently found resistance at the upper parallel tied to the trend-line off the July low. The pullback so far has been constructive and doesn’t indicate a market which wants to go into a full-reversal. In short, a healthy pullback. The past couple of sessions (today not finished yet, of course) we have seen silver find support around the June high which it surpassed to start the month. If we see a shove higher from here, then the lower trend-line may not be tested before seeing another attempt at recent highs.
If, however, we don’t see it hold then our attention turns to the lower parallel of two-month long channel. In our view, this is the more important line of support to hold to remain short to intermediate-term constructive. A break below doesn’t mean the upward trend is over, but it would bring pause and give shorts a reason to get more aggressive. Looking higher, the first obvious level to break above is the recent swing-high at 18.29. Beyond there we’ll look for a move towards the April high at 18.65.
A possible ‘fly in the ointment’ for higher prices is the futures positioning in not the silver market so much, but in gold. As we pointed out in last week’s COT report, large speculators (i.e. hedge funds, CTAs, etc.) have added to their long position at a pace which in the past has turned out to be problematic in the intermediate-term. Further price appreciation has been seen in similar situations in the short-term only to be given back. If this is the case this time around, then it is highly unlikely silver makes a meaningful advance without gold doing so as well. It’s a factor we’ll be keeping an eye on moving forward, but for now we’ll let price action be the final arbiter in determining our outlook.
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.
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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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