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We started out today by looking at the long and short-term positioning of gold and silver, as both have turned down from key spots. The US dollar bounce on Friday’s upbeat jobs report helped shove precious metals lower following reversal days earlier last week. With the DXY coming up off support, even if the strongly inverse relationship was to lose its intensity, a dollar rally is likely to keep a lid on precious metals at the least. Silver is the weaker of the two major metals, and on that our focus lies primarily there. The 2003 trend-line around 15 remains the target on another leg lower.
Crude oil has become increasingly more difficult to get a handle on, but it is consolidating below key trend-line resistance. This could mean the commodity is on the verge of breaking through if it can continue to hang in. The target on a further climb is around 51.50, where there is significant resistance. Should crude turn down there is a solid lower parallel rising up from last month’s lows which could offer a nice spot for existing shorts to cover and would-be longs to enter.
Global indices are a tough spot to be right now as a trader with volatility compressed. The Nikkei is coiling up into a symmetrical triangle and set to break soon, but the break might not be able to be trusted given how poorly the Japanese index has traded this year. The DAX is still stuck below resistance within the confines of a bearish ‘head-and-shoulders’ formation, but if the euro turns (which it could after last week’s reversal) we may see the DAX find support. In a light summer environment, sans any major catalyst, a rangebound market may develop between above just above 12300 down to around 12100. The FTSE 100 has been very difficult to get a handle on in the short-term, but pulling back and looking at the broad picture it is still very much in a strong trend marked by higher highs and higher lows; no interest on this end in fighting it. The S&P 500 is putting in a high-level consolidation taking on the shape of a triangle – looks headed above 2500 soon.
For the full technical outlook, please see the video above…
Check out the Q3 Forecasts for our take on where markets are heading.
—Written by Paul Robinson, Market Analyst
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