Analys från DailyFX
Silver Prices Drop Below 19.20 Level and Multi-Week Range
What’s inside:
- Short-term sequence of lower highs, lower lows led to selling
- Bottom of range at 19.20 failed to hold, long-term support zone lies below
- Futures market likely correcting with move lower
The last time we discussed silver prices (last Wednesday) we made note of the short-term downward trend within the range dating back to the beginning of July. The sequence of lower highs and lower lows seen on the intra-day time-frame (2-hr chart) signified the path of least resistance as being – down. Our ultimate target before possibly seeing buyers step in was at 19.20, or the low-end of the multi-week range.
On Monday, silver tested 19.20, but barely held this level by the close of the session. Yesterday, selling pressure pushed it through with little support from buyers. This was not the test and rejection of support which piques our interest from the long-side. A test or drop below 19.20 and strong close back above would have given indication the bottom of the range was likely to hold. But that was not the case.
The drop below 19.20 exposes silver to further selling, but we need to be mindful of long-term support which exists from current prices down to the low-18s.
The short-term trend remains lower, and as such a retest of the 19.20 level and failure may offer a good short set-up, even if only for a hit-n-run trade as silver falls into meaningful long-term support.
From a long to intermediate-term standpoint, we have discussed on several occasions the belief that until record long positioning by large speculators in the futures market corrects with price, we believe silver will find it difficult to move higher. The weekly Commitments of Traders (COT) reports include activity from Wednesday to Tuesday and are released on Friday’s. This most recent drop should show a material decline in long holdings as large speculators have likely reduced their holdings during the past week. We will soon take a look at this dynamic and how it may impact the future direction of 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 any 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
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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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