Analys från DailyFX
Silver Prices: Confluence of Resistance Turns into Lone Levels of Support
What’s inside:
- Short-term confluence of resistance turns into individual levels of support
- Silver prices in the middle of range created during the summer
- Looking for higher prices on hold of support
The other day we looked at silver prices while they were sitting up against a confluence of short-term resistance; an inflection point which was quickly broken in the hours after publishing that commentary. The strong push through means those technical events which collided to present a hurdle for silver go from being resistance to support. At this juncture, those events are no longer colliding with one another due to their angling, but on their own each are viewed as levels of support.
Putting the short-term picture into perspective, the recent surge off the late August lows is coming from a pivotal area around 18.50, which was the peak from very early 2015. It is still unclear whether this will have ended the decline and a new leg higher can commence just yet. More is needed from the metal before drawing any concrete conclusions about the big picture.
Silver prices are sitting in the middle of a range which was in place for most of July and a large part of August. As long as support levels can hold, it would be reasonable to conclude a move to the mid to upper-20s, which made up that range, could take shape in the foreseeable future. Gold is looking the better of the two at this time, sitting just shy of the 2011 to current down-trend line. A break above will keep the December to current uptrend continuing; this would certainly be a big positive for silver, obviously. (Watch for a weekly close above ~1360.)
The most significant support level to watch in the short-run is 19.20. It acted as solid support earlier in the summer, and while it didn’t act as key resistance on this current surge higher, is still viewed as a pivotal level when looking at the broader picture.
Ideally, a day or two of consolidation develops to show willingness for silver to hold up after a big run, and to recoil for another jet higher. For now, silver is viewed through a cautiously bullish eye, but should silver slice through support versus a gradual decline and hold of any of those levels, then we will need to consider alternatives.
Keep any eye on the US dollar, as in recent trade it has been a good source of strength for precious metals. A daily close below 11841 in the USDollar will be a key event for the index, likely leading to continued weakness and helping along silver.
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—Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX.
You can email him at probinson@fxcm.com with questions or comments.
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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