Analys från DailyFX
Silver Prices: Bullish Pattern Faces Important Trend-line Test
What’s inside:
- Silver prices dip then rip, triggering a bullish pattern
- The HS formation points to much higher prices, but July trend-line stands in the way
- FOMC later today
In last week’s post, we made note of the uptrend dating back to December running into major resistance over the 17 mark. At first, silver prices turned lower, but have come back in recent sessions; the process of dipping and ripping put in the ‘right shoulder’ of an inverse ’head-and-shoulders’ pattern, and also triggered the ‘neckline’ as well. It was a quick development on the right side, but nevertheless there is decent symmetry to the two-month long formation.
Crossing over the barrier in the low-17s and breaking the neckline of a bullish HS formation is a good start for an extended rally. However, before we become overly ‘bulled up’, silver needs to break above the downtrend line in place since the July spike high. There are a good number of inflection points along this line of resistance, adding even more importance. If silver can’t overtake this trend-line, then optimism will be kept at bay. A break above, though, would appear to open up a fairly clean path for a move higher towards 18.50/19.
Should we see a breakout above the trend-line, keep an eye on the upper parallel belonging to the trend-line off the December lows, the 200-day at 17.87, ~18.50, then the November peak at 19. The measured move target, based on the depth of the HS pattern, points to a move of about 1.60, or close to 19 (aligns nicely with resistance).
A turn lower will bring the 17.00/32 zone into play as near-term support, followed by the December trend-line.
Silver: Daily
Created with Tradingview
If silver is to rip, it will likely to be accompanied by an aggressive decline in the US Dollar. The US Dollar Index (DXY) is below the 2015 peaks it broke above following the U.S. election, and is at risk of seeing an increase in selling pressure as it drips further below the 100 mark. (We delved into this a bit last week.)
Heads up: Later today, at 19:00 GMT the FOMC will announce its decision on rates and provide a policy statement. There are no expectations for any changes to be made, so the market will be focused on the language in the statement. Expect heightened volatility.
See our Webinar Calendar for a schedule of upcoming live events with DailyFX analysts.
—Written by Paul Robinson, Market Analyst
You can receive Paul’s analysis directly via email by signing up here.
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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