GOLD (daily)Upside: Gold has broken out from a three-month inverse head and shoulders. RSI and MACD are rising strongly.
Resistance: Fibonacci 23.6% retracement line at about $944; first lower high at about $960.
Downside: No clear indication.
Support: Downtrend line at about $920; falling 50-day MA, currently at $891.88.
Bottom line: Gold may test its broken downtrend line. If it does that successfully, the yellow metal could enjoy a run of about $100 -- the depth of the head in the inverse head and shoulders.
SILVER (daily)Upside: Silver is back above its falling 50-day MA. RSI is rising strongly.
Resistance: Top rail of magenta channel, just overhead; top rail of thin blue channel at around $18.10.
Downside: Both the magenta and thin blue lines have offered effective resistance in the past.
Support: Falling 50-day MA, currently at $17.07; bottom rail of magenta channel; rising 200-day MA, currently at $16.22; bottom rail of thin blue channel.
Bottom line: Silver hasn't yet managed to break out of its thin blue channel (which could be read as a non-confirmation of gold's breakout). If it does break out, like gold it will have formed an inverse head and shoulders, with bullish indications.
GDX (daily)Upside: The gold-mining ETF has broken in quick succession through its 50-day MA, 200-day MA and the bottom rail of the purple channel, on sturdy volume. RSI and MACD are rising strongly.
Resistance: Recent highs at $49.82 and $51.45.
Downside: GDX's rocket-powered rise has left clear gaps that are likely to be filled in due course. There's substantial overhead volume until $51 or so.
Support: Bottom rail of purple channel, at about $48; rising 200-day MA at $47.34; falling 50-day MA at $45.53.
Bottom line: The gold miners have woken from their slumber and are taking their traditional position ahead of the yellow metal in its current rally. But without a substantial base to propel it higher, GDX is in for a volatile ride.
U.S. DOLLAR INDEX (daily)Upside: The index has broken only slightly below its green channel, and there is a chance, but only a slim one, that support will hold.
Resistance: Rising 50-day MA, currently at 72.91; top rail of green and blue channels, currently at about 74.8.
Downside: The index appears to be breaking down from its green channel. RSI and MACD are falling.
Support: Bottom rail of blue channel, currently at about 71.
Bottom line: If the dollar's breakdown is confirmed by subsequent action, the green channel could be read as a bear flag, portending new lows.
1 comments:
The daily chart of EUR/JPY, FXE:FXY, the barometer of the yen carry trade, shows that the yen carry trade is unwinding. The weekly chart of FXE:FXY shows that the yen carry trade has topped out.
Crown Forex writes "As for the Yen being the star in the forex market, risk aversion and investors risk appetite was able to help the yen gain against majors in the markets as investors were unwinding their carry trades taking the USD/JPY pair down to the 106.20s as the dollar continues to lose ground. Against the Euro, the yen gained from a record low at 169.45 to continue dragging the pair down to the current support level at 167.12 while the GBP/JPY is currently at 211.10s".
Risk aversion will rise significantly as corporate profits turn down; investors who sell stocks will be looking to the financial safehaven of gold.
And a higher yen means a lower US dollar; in as much as gold trades inversely of the dollar; gold will be going up.
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