Analys från DailyFX
Silver Prices: Game of Ping Pong in Progress
What’s inside:
- Silver bouncing between support and resistance
- A positive development as long support is held
- A breakdown below support and top of triangle would be not be good for longs
In yesterday’s post, we were discussing the reversal in silver prices off resistance post-FOMC, and the need to hold above 18 for longs to stay out of trouble (yesterday’s LOD was 18.01). Silver is currently playing a game of ping pong between support and resistance. This could be a good thing for the long-side of the tape, as a consolidation after a surge out of a pattern can set the market up for another launch higher.
Support comes in by way of the recaptured January trend-line and support zone running back well over a year. A break of 18 will quickly expose the upper part of the October triangle in the 17.70s. This would still be viewed as support, but the fact silver will then be back below the Jan trend-line and still in a downtrend since July would be concerning. So, its best the metal continues to hold onto the trend-line and stay above 18 if it is to take another ride higher.
A break back below trend-line support, 18, and through the triangle would be considered a major failure. At that point the 10/6 low at 17.11 will quickly come under fire. We’ll discuss what we view would happen from there should that scenario present itself.
For now, our interest lies in seeing if support can hold and whether a continuation set-up can develop in the days ahead.
Levels to watch: Resistance at 18.40 (August low, still haven’t closed strongly above), 18.64 (11/3), 18.74 (11/2), and beyond there silver has room to run towards the July trend-line (19). Support comes in at 18.16 (today’s low), 18.01 (11/3), then 17.70s (October triangle.)
Silver: Daily
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Data heads up: It’s NFP Friday. The market is looking for a print of 175k and the unemployment rate to tick lower to 4.9% from 5%. Wage inflation via average hourly earnings will be of interest, currently at 2.6% YoY. The reaction in silver will be based primarily on the headline NFP figure. It will likely require a substantial deviation from NFP expectations to cause a sharp sustainable move, +/- 50k or more.
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—Written by Paul Robinson, Market Analyst
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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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