Analys från DailyFX
Silver Prices Above Key Resistance, Dollar Giving Bulls a Boost
What’s inside:
- Silver trading above resistance and clearly out of triangle formation
- US dollar break to offer tailwind
- Long-term trend-lines back to early 2015 and 2013 coming into focus
A few weeks back we began discussing silver prices and its potential paths if it could break free from the contracting price action unfolding. Indeed, we saw a breakout to the upside. This was not the preferred direction from an execution standpoint given it was against the prevailing downward trend. Counter trend triangle breakouts can be tougher to execute than the continuation variety. That is exactly what we have seen thus far – a difficult trade.
Once silver initially broke higher in late January it failed to capture the $14.40/50 area which had acted as key support and resistance since the middle of last year. Once failing at resistance silver then retested the triangle and held. Since then it has managed to find its way firmly above not only the all-important resistance, but to the highest levels since November.
Gold has held a firmer backdrop since late November/early December, with the coupling of both price and futures market positioning offering support. Bottom line, it has been the preferred long. That could be changing now as the landscape for silver changes as well.
The dollar took a nasty spill yesterday, the worst since March of last year. Given its break is coming from elevated levels near recent highs, there is good reason to believe it could be the ‘kick-off’ to something much larger. If this is the case then precious metals will receive a positive tailwind from dollar weakness.
The next area of contention for silver comes in the $15.10/25 area. In there lies a pair of trend-lines, depending on how they are drawn, extending back to January of 2015 and 2013. These coincide well with the roughly $1 measured move target the height of the triangle projects. Above there and we can start thinking about a move above the $16 mark and possibly higher as the big picture will be turning increasingly bullish.
Silver Daily: July ’15 – Present
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—Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX or email him directly at probinson@fxcm.com
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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