Analys från DailyFX
Silver Prices: Picking Up Loose Change in the Range, Scalpers’ Market
What’s inside:
- Range contain remains for the swing trader
- Triangle broken to the down-side in line with short-term trend
- Scalpers can look to trade along path of least resistance towards 19.20 support level
In Tuesday’s commentary it was reiterated that the range in silver prices is likely to continue for the foreseeable future, which doesn’t make for the most exciting trading environment. Our game-plan has been, and continues to be, one of patience until we reach either the upper (~20.60/75) or lower (~19.20) bounds of the range before looking to establish a trade in the opposite direction on a swing trade basis, price action willing. Should one side of the range break with conviction, then we would look for a pullback retest before possibly taking entry (More on that later…)
The middle of the range, where we live now, is left to the scalpers; those who are trading with time-frames of a few minutes to a few hours.
Yesterday, we highlighted a triangle building within the range, one which could break in either direction, but, again, given the broader range we are not inclined to become involved. The lower trend-line of the developing triangle broke to the down-side, in line with the trend of lower highs and lower lows since the 8/10 peak. For the very short-term-minded trader this helps clarify the path of least resistance in the short-run and opens the door up for a move to the low-end of the range around 19.20.
As long as the sequence of lower highs and lower lows continues, then we look to 19.47, 19.30, and 19.20 as the next levels of support. Keep an eye on the lower parallel of the trend-line off the 8/10 swing high as support, too. It would require a turn back above yesterday’s high and the top-side parallel to bring the current downward trend structure under fire.
The current set-up and general environment in precious metals is best left up to those looking for scalps of a few cents here and there, as risk/reward from a swing trade standpoint continues to be unfavorable at this time.
Track trader sentiment in real-time via FXCM’s ‘Speculative Sentiment Index’, or ‘SSI’.
—Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX.
He can be emailed 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
Confidence is essential to successful trading, see this new guide – ’Building Confidence in Trading’.
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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