Analys från DailyFX
Silver Prices Update: Short and Medium-term View
What’s inside:
- Silver fake-out breakdowns from triangle formations made recent trading tough
- Struggling with 19.20s short-term
- Broad and short-term technical considerations
On Friday, when we last discussed silver prices, we were focusing on the enlarging triangle formation which earlier last week provided a false signal. We had this to say – “The development and eventual break of triangles can be tricky at times” – and so it was, as another breakout from the formation led to a second false break a couple of days later. That can be the perils of trading these volatility-born patterns; triangles almost always lead to an expansion in volatility, but it doesn’t necessarily mean the volatility will be trader friendly.
Triangle fake-out, breakouts (volatility rises, but not trader friendly)
Moving on to the current situation – from a broad standpoint – volatility is contracting above significant long-term support in the 18s, with price action working its way towards the development of a triangle. Time will be needed before we can draw concrete conclusions, but it’s in the works.
Taking a look at the short-term chart, silver is once again pitted up against resistance in the 19.20s. This is an area which goes back more than three months, and once acted as support until it was broken and tested as resistance earlier this month. Yesterday and this morning, so far, silver is struggling to climb above. As long as the ceiling remains in place, then the bias in the short-run is skewed neutral to negative. It will require a recapture of old support/new resistance before our bias can turn to the upside.
A turn lower from the 19.20s will bring our attention to the trend-line off the 8/29 swing low, Friday low of 18.63, and then the August low at 18.37. If silver can manage to push convincingly through resistance, then the top-side trend-line running back to the 7/4 spike-top and 9/6 high at 20.11 will come into focus.
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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
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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
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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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