Analys från DailyFX
Silver Prices: Roadmap for Navigating Current Technical Landscape
What’s inside:
- Silver struggling at July trend-line
- Supported by low 17s, neckline
- Trading considerations from both sides of the tape
On Wednesday, we were looking at silver as it traded above the neckline of an inverse HS formation, but was facing off with important trend-line resistance extending back to the July high. Yesterday, as the US dollar reversed, so did silver off this important line-in-the-sand. The decline off the Thursday high is putting silver back down towards the low 17s, an area the metal previously struggled to overcome since November. This barrier (now support) dating back to June roughly coincides with the neckline. The zone from the current price (17.32) down to ~17 is big support and a break below and the trend-line extending higher from the December low would quickly expose the possibility that the bullish bottoming pattern is on the verge of failing. If this were the case, confirmation would come on trade back below the right shoulder low created on 1/27 at 16.64.
But before we go jumping the gun, again, silver is challenging support and will be treated as a potential floor until broken. With that said, right now there isn’t much to the upside to get excited about until a solid closing bar above the July trend-line takes shape. This could come on a daily basis or even better, on the weekly time-frame.
Silver: Daily
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Traders looking out over the short-term are caught between strong support and strong resistance. This makes for a difficult situation to trade in either direction. Those looking out over a longer-term horizon – weeks or longer – are faced with a decision here. Aggressive traders may look for ‘best prices’ by establishing a short position along the July trend-line, with stops not far above. However, there is the conflicting bullish inverse HS formation to take into consideration. With that in mind, waiting for a break of the right shoulder low looks like the safer way to play this at the moment. For those looking to establish a long position, yes there is the bullish pattern in play on your intended side of the market, but the steadfast downtrend line needs to give-way first before upward momentum can set in. On that idea, waiting for silver to break above the trend-line first looks like the more prudent move on this end.
Whether bull or bear, the current technical landscape offers a roadmap to follow in the event of a resolution in either direction.
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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.
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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