Buckle Up $Dollar – Daily View 29th May

Bullion Daily

bull down syndrome

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

Not out of the woods yet and gold seriously need a big push higher to even consider any form of reversal. The price action from yesterday seems to suggest indecision between buyers and sellers but the other indication is that short sellers are wary thus profit taking at 1180 is warranted. The blip higher could just be short covering and nothing else. Meanwhile, only a real change of view regarding the current dollar strength as well as other fundamental news will change the current view.

As mentioned in yesterday’s commentary “We will not rule out a retest lower in the short time frame and should 1183 hold we could see gold trying to advance higher. Failure to hold 1183 then 1178 and 1168 will be the next support.

Federal Reserve hawkish remark and clear statement by Miss Yellen on an imminent interest rate hike has given dollar bull another lifeline. We continue to question if this is sustainable in the short to medium term. The dollar index could still test higher – possibly a triple top? Our other assumption is that Miss Yellen already knows that GDP result is a rotten apple thus giving dollar sufficient buffer. We will find out soon enough aren’t we? Strap on and remember to keep a tight stop loss.

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 1213 / 100 at 1211 / 50 at 1198 and 20 at 1199
  • Previous high at 1192.50

Daily Support Levels:

  • Previous low at 1180.20
  • May low 1170.30

The dip to 16.53 was quickly bought, ending the day with a doji candlestick. Short time frame seems to suggest growing RSI divergence and with the dollar bulls wavering – silver managed to reclaim 16.70 levels again. Just like gold, the white metal is not out of the woods yet and only a solid green day will suggest a reversal. We continue with our view as per 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 16.88, 100 ma at 16.67, 20 ma at 16.84

Daily Support Levels:

  • DMA levels 50 at 16.60
  • Fib retracement level 50% at 16.66 and 38.2% at 16.40
  • Lower BB at 16.02 (watch BB rising and Converging)

A new low at 1107.8 but it is not over yet. Weakness continues in Platinum with lack of interest from buyers. Sellers remain in control and prospect of recovery remains bleak. However, we will not rule out a sudden change after the release on US GDP and how the US dollar will react to the data. Platinum is reaching an oversold territory but with no pullback, it could very well indicate a potential short covering momentum to push it higher. The RSI has not broken below the range that it has been trading but all that could change soon.

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 1171 / 50 at 1145 and 20 at 1141

Daily Support levels:

  • Previous low at 1107.8
  • March low at 1086.5

As mentioned in previous commentary “Yesterday price action was an inside day and failure to break and close above 787.1 should allow the bears more room to test lower. Upside continue to be limited as a lower high and lower low is created in this wedge (or bull flag?). The chart remains hard to read but we maintain a semi bearish stance here until we see a breakout. “Sellers remain in control here and a retest of 771.5 could well be underway.

Only a break above 801 will give the bulls the confidence to test higher prices. Current price action is dominated by sellers. We aware that price is range trading in this wedge and a breakout on either side will determine the next direction.

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 792 / 100 at 779 / 20 at 783
  • 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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