FOREXYARD: Forex News Blog | |
- Silver Breaking Through Resistance Despite Fundamentals
- Triangle Breakout Trade for Silver
- EUR May See a Much Needed Recovery Today
- Gold at Two Week High over Euro-Zone, North Korea
- Identifying Support and Resistance Levels of Silver
- Head and Shoulders Pattern Signals Reversal for USD/SEK
- Gold’s Cyclical Downturn Could Reach $1280
- Gold Support at $1280 an Ounce
- GBP/CHF Reversals in the Making
- Gold and Silver Expecting Cyclical Retracement?
| Silver Breaking Through Resistance Despite Fundamentals Posted: 24 Nov 2010 05:24 AM PST
Silver has been outpacing other precious metals recently, closing at $27.32 an ounce last Friday. This trend continued at the opening of this week’s trading, with Silver closing above $27.80 on Monday. Today, we’ve seen the price descend back to a recent low of $27.18, even though fundamentals have been driving Gold prices higher. A strengthening US dollar may have been one factor pushing against this recent wave of bullishness being seen among precious metals. EUR weakness could also be adding to the USD’s latest gains. Silver traders should be keeping their eyes on news coming from Europe. Any flight from the region’s assets will likely end up in the US dollar, putting downward pressure on precious metals, oil, and other commodities. Moreover, any increase in interest rates in China could also suppress demand for precious metals. As we head into the holiday shopping season, precious metals like Gold and Silver should find added support. Claims for $30 Silver have been posited, and expectations for an impending cyclical downturn in both Gold and Silver has been documented by me previously; but taking place, most likely, after 1 January 2011. |
| Triangle Breakout Trade for Silver Posted: 24 Nov 2010 01:19 AM PST
A continuation pattern has formed on the silver charts setting up a breakout play to the upside. The 4-hour chart displays a triangle chart pattern with the ascending leg beginning on the 3rd of November and the descending leg beginning at the all-time price high of silver at $29.34. Traders should be anticipating a breakout to the upside as this trade would be in line with the direction of the long term trend. However, a breakout lower is also viable but less likely. To find the expected move following a breakout the base of the triangle is measured. Therefore, we can anticipate a potential move higher of $5 with an approximate target at $32.50. Patience will be needed as traders should wait for a definitive signal that silver has moved outside of the triangle chart pattern. A protective stop should be placed inside the triangle to guard against a potential false breakout. The stop can be located below the support at the price of $27 (S1).
|
| EUR May See a Much Needed Recovery Today Posted: 23 Nov 2010 11:02 PM PST
Following a long bearish streak versus the CAD over the past few days, the EUR seems to be headed for a bullish correction. Forex traders are advised to take advantage of this knowledge by going long on EUR/CAD now. Below is the 8hour chart of EUR/CAD. The technical indicators are the RSI, Slow Stochastic and Williams Percent Range. - A breach of the lower Bollinger Band is evident on the chart (1), indicating an imminent upward correction may be expected.
|
| Gold at Two Week High over Euro-Zone, North Korea Posted: 23 Nov 2010 12:18 PM PST
Europe's sovereign debt concerns and escalating tensions between North and South Korea boosted Gold prices to a two week high as investors fled to the safety of the metal. Political and economic uncertainty tends to benefit the commodity as it is perceived as a haven investment. The renewed investment wave in the metal began as the Irish debt crisis unfolded as people began shedding risk. Gold futures for December delivery rose $16.50, or 1.2%, to $1,374.30 on the Comex in New York. Discouraging signs from the U.S economy also contributed to today's rally. It is difficult to say. However, whether today’s gains signal a short-term bounce or return to the momentum that has driven prices to a record high of $1424 an ounce earlier this month. Volatility has been extremely high in Gold trading over the past few months; driven mostly by economic growth expectations from China and uncertainty about the pace of rising demand. Monetary policy in the U.S and China tends to have the strongest impact on the commodity. Gold's rally was hindered by expectations of monetary tightening by China that may precede other developing nations thus curbing demand. Gold traded lower as investors were liquidating their positions throughout last week, ahead of today’s options expiration and as the rollover continues from December futures into 2011 contracts. As options expire Gold prices could trend lower. Overall the momentum seems to have subsided slightly with investors getting more nervous as we get close to year end. It is likely that Gold prices will remain higher for this week, heading to the long holiday weekend in the U.S as economic and political turmoil seems to dominate market sentiment. Any escalation in relations between the Koreas' or further disappointing news from the euro-zone will likely push Gold above $1380 an ounce. We are, however, unlikely to see Gold levels breaching $1400 again ahead of the new year. |
| Identifying Support and Resistance Levels of Silver Posted: 23 Nov 2010 09:10 AM PST
Key support and resistance levels are readily identified when working from the daily chart. Taking yesterday's analysis one step further, significant support and resistance lines are identified on the daily chart below. Traders can see that the next major support lies at the mid November low of $25, followed by a further support line at $22.80. The major resistance level rests at the all-time high for the pair at $29.34.
|
| Head and Shoulders Pattern Signals Reversal for USD/SEK Posted: 23 Nov 2010 04:22 AM PST
The daily chart of the USD/SEK is showing an interesting chart pattern that hints at a reversal in the long term trend of the pair. Despite the renewal of the European debt crisis the Swedish krona has struggled to make up ground versus the euro. During the period of the Irish debt crisis the Swedish krona has since depreciated against both the euro and the dollar. As fears of another fiscal crisis rip through Europe, the euro is stronger versus the Swedish currency. After months of speculation that Spain, Italy, or Portugal would be the next nation to require rescue funds from the European Financial Stability Mechanism, it was the Irish banking crisis that has caused Ireland to agree to a funding option from both the European Union and the International Monetary Fund. Even Sweden is offering up to $1.6 billion in aid to shore up the Irish banking system. In a speech yesterday the Swedish Finance Minister announced his country's intention to provide aid to a fellow EU member nation. To promote trade amongst EU members it is in Sweden's best interest to give financial support Ireland. It is no secret that a healthy EU will allow for more open trade and economic growth. This may explain Sweden's enthusiasm for offering loans to Ireland. Should the economic crisis spread to Portugal and Spain, the economy of Sweden may experience a drop off in economic productivity. As such, an explanation for the weakness in the Swedish krona may be a result from the European debt crisis. European nations that are part of the European Monetary Union account for more than 32% of Swedish exports. An economic slowdown in these nations could take a toll on the Swedish economy and is a downside risk for the Swedish krona. The daily chart of the USD/SEK is showing some interesting chart patterns. The long term trend line which held since early June was recently breached. This trend line should serve as a new support level. The pair made a head and shoulders bottom beginning in the month of October and through early November. The neck line has since been breached. This could signal a reversal of the long term downward trend. When measuring the neckline of the head and shoulders pattern an estimate of the potential move may be 2800 pips from the breach of the neck line. This measured move coincides with the support level from the August low at 7.0390.
|
| Gold’s Cyclical Downturn Could Reach $1280 Posted: 23 Nov 2010 02:43 AM PST
As I mentioned in an article yesterday, the price of Gold has been operating in long-term cycles of advance-and-retreat for the past year-and-a-half. While the overall trend is bullish for precious metals (Gold, Silver, and Platinum), there are periods of downturn in each. Looking at our chart below, it seems as if evidence is mounting for just such a movement. Expecting a bearish correction is different than claiming a trend reversal. I am in no way disagreeing with other analysts whose claims place precious metals within a bullish channel. To the contrary, I agree with such claims, but would like to recognize the opportunities for short-term profits within the cyclical fluctuations of these instruments. As we can see in the chart below, Gold has been moving with a rather distinctive pattern. Marked with a red line on the chart below, we can see the general direction of the overall trend of Gold. But notice that the price deviates away from this trend with sharper upturns. It's as if the market is slamming its foot on the gas pedal and then hitting the brakes, over and over. I call this the "teenage drag-racer" formation. But it goes beyond chart formations. We have a descending RSI, moments away from exiting the over-bought region. We also have a recent bearish cross on the Stochastic. Both indicators suggest bearishness. Also, if we follow our "teenage drag-racer" pattern, we can pick a great entry/exit point for traders. Those going short on Gold may want to place their Limits near $1280. Those waiting for an entry point for another Buy position on the general uptrend should likewise aim for $1280 an ounce. If the bullish channel persists through the winter season, as it should, targets upward of $1500 an ounce may not be far off following this retracement. |
| Gold Support at $1280 an Ounce Posted: 22 Nov 2010 11:36 PM PST
The price of gold has been rising steadily for the past several months with what appears to be no end in sight, and has been range-trading widely between $1280 and $1400 these past few weeks. The expectation among many analysts seems to be that gold should continue trading in the $1300s through the month of November. This flat trading behavior may then start to die out towards December when the steadily rising prices we've seen among the precious metals markets continues with full force. A ray of sunshine for investors, however, is the predictable bouncing behavior we should see in gold prices for the next month or so. I'd expect to see gold bouncing against the $1280 price mark at least one time before continuing a strong uptrend heading into the global holiday shopping season. Entry orders for long positions around that price are to be expected; I would be surprised to see a major breach below that point as a result. Below is the weekly chart of gold provided by ForexYard. I've drawn Fibonacci retracement lines over the chart to illustrate the support and resistance levels relevant. Once again when the rising trend has been identified, traders should only be long on gold. Entries and exit strategies should then be identified from the daily and hourly charts. Gold Weekly Chart |
| GBP/CHF Reversals in the Making Posted: 22 Nov 2010 10:00 PM PST
The GBP has dropped significantly versus the CHF in the past week, and it is currently traded around 1.5770 levels. And now as evident in the data below, the 4-hour chart is giving bullish signals, indicating that GBP/CHF pair might go up. Forex traders can take advantage of this impending movement by having their Entry Orders in place to capture this reversal. • Below is the daily chart of the GBP/CHF currency pair. • The technical indicators that are used are the William Percent Range, Relative Strength Index (RSI), and Slow Stochastic. • Point 1: The Slow Stochastic indicates a bullish cross, signaling that the next move may be in an upward direction. • Point 2: The Relative Strength Index (RSI) indicates that the price of this cross currently floats in the oversold territory, signaling upward pressure. • Point 3: The Williams Percent Range shows that this pair was heavily over-sold peaked near the highest mark it could reach, and then turned a corner and now stands in a bullish posture. GBP/CHF 4-Hour Chart |
| Gold and Silver Expecting Cyclical Retracement? Posted: 22 Nov 2010 11:27 AM PST
We've been watching the price of precious metals soar over the past several months and many analysts will tell you to expect a continuation of this trend. We must not forget that global economies are still suffering financial concerns and that normalcy remains elusive to the current state of the world economy. In such an environment, safe haven investments – like Gold and Silver – tend to rise. But to short-term, intraday traders there is yet another side to this story. While it is true that Gold and Silver are on the rise, and will likely remain so for some time, it is also true that every trading instrument moves in cyclical patterns. Gold and Silver each possess a number of technical indicators which point to a buildup of bearish pressure. This is clearest on the Gold weekly chart (see below). A pattern has emerged on the price of Gold which is worth exploring in greater detail. Stay tuned this week for a deeper look into the cyclical pattern of Gold which has developed over the past year-and-a-half, as well as its implications for other precious metals, such as Silver. Gold – Weekly Chart |
| You are subscribed to email updates from Forex Trading Education : Forex Trading Blog by FOREXYARD To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
No comments:
Post a Comment