Weaker Metals as Dollar Rampage – Technical View 26th May

Bullion Daily

The following information is a guideline (trading plan) and should not be treated as financial advice. Not advice but banter and active in sharing trade ideas via twitter @sugardaddyFED

This pullback has certainly raised many questions after an impulsive move higher followed by failure at key resistance level before an impulsive move lower. With the US dollar resuming its current course, precious metals will be subject to further selling pressure and continue to find support. We highlighted several green zones which were visited many times for support and resistance. Once again gold failed to find any decent support and a move lower now to 1191 -1193 levels is possible today. Should selling escalate, we will look for 1184 as last line of support to go long. Dips are still buying opportunity in the short to medium term as long as gold is trading above 1178.

Also, we are keeping a close eye on the daily RSI that has been range trading since April 2015. As highlighted on the above chart, a low is imminent either this week or next but we remain cautious on how the current US dollar rally play out. Potentially looking to long gold between 1185 – 1195 levels.

Below are key levels that we will continue to monitor and this will change depending on price action.

Daily Resistance Levels:

  • Previous high at 1232.31
  • DMAs 200 at 1214.7 / 100 at 1212.417 / 50 at 1197.74 and 20 at 1200.33

Daily Support Levels:

  • Fib level at 1193.26 and 1184.15
  • 13th May low at 1191.17
  • 11th May 1178.78

Silver continue to pullback and at the moment, the price action is a healthy one. In the short term, we continue to see lower prices and Silver need to find support as mentioned in previous commentary (see below).

A break lower will find support at the following key levels 16.40 -16.60 which is a potential fertile area for longs to build on. On the daily, those levels hold the 50% and 61.8% Fib retracement area which should provide decent support. This also coincides with the rising orange channel line that should keep the run higher intact for now. Note the red AB – CD line could play out in the short medium time frame.

To highlight the downside risk, a break below 16.08 will spell big trouble for Silver as it opens up the possibility to retest 15.85 levels.

Below are key levels that we will continue to monitor and this will change depending on price action.

Daily Resistance Levels:

  • Previous daily high at 17.75
  • Psychological level at 18.00
  • Downtrend line that coincide with 18.00
  • 200 ma at 16.93

Daily Support Levels:

  • Several key DMA levels 100 at 16.67 / 20 at 16.78
  • Fib retracement level 50% at 16.66 and 38.2% at 16.40

Platinum continue its pullback and we are monitoring how the Bollinger band is converging with its low BB line at 1120 as of the time of writing. In addition, the RSI is giving a clue to the next possible price action. The daily RSI has been on a rising pattern since April 2015 but upside remains capped at 58.95 levels. Buyers need to flock in to snap up platinum at a possible bargain price this week in order to maintain our semi-bullish outlook to test 1165 – 1170 levels again.

We maintain a semi-bullish outlook and would still prefer to build long if there are any pullbacks – targeting 1137.5 – 1143.5 levels.

Below are key levels that we will continue to monitor and this will change depending on price action.

Daily Resistance levels:

  • Previous daily high at 1177.1
  • 100 dma at 1174.79 / 50 at 1145.6 and 20 at 1145.64

Daily Support levels:

  • Rising orange channel line at 1131.7
  • May low at 1121.1

We will stick with our previous outlook and could well add to our short positions at 786 – 791 levels. Palladium bull has certainly showed exhaustion and we are very much veered to a bearish stance. A small short position has been initiated at 780 with stops at 793.5 to target 762 and 755 support zones.

Below are key levels that we will continue to monitor and this will change depending on price action.

Daily Resistance levels:

  • Previous daily high at 801.6 and 797.6
  • 200 dma at 793.96 / 100 at 779.84 / 20 at 782.74
  • Downtrend line (see the shaded brown zone)

Daily Support levels:

  • DMAs 50 at 771.35
  • Fib retracement levels 38.2% at 771.5 / 50% at 762.3
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