Analys från DailyFX
Silver Prices Looking for Separation from July Trend-line
What’s inside:
- Silver prices working on further clearance above July trend-line
- Inverse HS formation could grow legs with the break
- Levels outlined
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When we were last discussing silver prices on Friday, we laid out a tentative plan for both would-be longs and shorts. The confluence of a bullish bottoming inverse head-and-shoulders pattern with the trend-line off the July highs put both sides of the tape on pause; confirmation needed. For shorts, we were patiently waiting for an invalidation of the HS formation with a break below the right shoulder. We’re nowhere near doing that at the moment. For longs, we said a clean break of the July trend-line would clear a path for momentum to kick-in, furthering along the bottoming formation.
Yesterday, silver saw decent buying pressure and closed above the trend-line we have drawn in; this tilts the picture in favor of the bulls. We’re hanging out around the breakout level, with early trade today pushing silver marginally lower. As long as we don’t see a sharp drop back below the trend-line we’re going to run with the break from yesterday. We would prefer to see it push a little higher above the trend-line to get full clearance, but we’ll start working with what we have here, and should we get that push then our bias towards higher prices will increase with the price of silver.
Provided that silver starts rising and doesn’t drop swiftly back below the trend-line, we will have our eyes on the 200-day and top-side parallel; both not far ahead around the 17.87 mark. If the inverse HS is to play out, this should only prove to be a minor bump in the road, if it is one at all. There could be some ‘trouble’ around 18.50 (August swing low, November closes below that low). What we’re really looking for on further strength is an eventual move towards the November high at 18.99. This level also aligns nicely with the symmetry of the HS formation, which based on its depth points to a measured move to right around 19.
Silver: Daily
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—Written by Paul Robinson, Market Analyst
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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.
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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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