Analys från DailyFX
Silver Prices: Under Pressure Ahead of ADP and ISM Services
Talking Points
- Silver prices give back large parts of last week’s gains.
- Short-term resistance is today’s high of $17.45 and the very short-term trend is bearish below this level.
- A batch of US macroeconomic reports are on deck today and may have a big impact on silver prices
Silver prices were under pressure at the time of writing and had given back large parts of last week’s gains. If prices were to reach the $16.78 level then a complete reversal of last week’s gains would have occurred.
The losses to silver prices are on the heels of a stronger USD and the current decline is challenging the current uptrend of silver prices.
We note that the ability of prices to stabilize has been low. Price was, at the time of writing, trading at $17.20 with the next support level being the April 27 low of $17.03. Above the April 27 low of $17.03, the trend remains bullish as the April 27 low of $17.03 is a higher swing low in relation to the April 25 low of $16.78.
Short-term resistance is today’s high of $17.45 and this level is also the short-term trend defining level, as it is the most recent swing high of the short-term downtrend which started from the $18 level this Monday. The next resistance level beyond the $17.45 high is the May 3 high of $17.70 and is followed by this Monday’s high of $18.
A batch of U.S. macroeconomic reports are on deck today. One of session’s most important reports is the U.S. ADP Employment Change, which a Bloomberg News survey is projecting to print at 195k, a slightly lower amount compared with last month’s reading of 200k.
In relation to the importance and the ability to move the market, a key indicator is the ISM Non-Manufacturing Composite. It is key as it gives us a glimpse of the health of the U.S. service sector, a large part of which is attributable to U.S. first quarter GDP growth. A Bloomberg News economist poll projects a rise to 54.8 from 54.5.
Our Market forecasts for Q2 2016 are now live on the site. Download them for free.
Silver Price | CFD: XAG/USD
Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano
— Written by Alejandro Zambrano, Market Analyst for DailyFX.com
Contact and follow Alejandro on Twitter: @AlexFX00
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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