Corrective Bounce Thanks BOJ – Daily 10th June

Bullion Daily

Game-8-boring-draw

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. You can also follow us via TradingView.com for the latest charts update.

3rd consecutive day of bullish bar as price break free from the downward channel line with a short term bottom at 1162 levels. Despite all the bearish news being said and called for, more often than not our contrarian view stand corrected. Every time gold gets in the news, we would be cautious and do the opposite. The morning comment from BOJ certainly took the gas off dollar bulls and the chart on the dollar index is being questioned as money flows are rotating out of the dollar. Once again, we highlighted our concern yesterday about the recent dollar strength and the current rotation could be profit taking ahead of FOMC meeting.

We do however, question if the USD strength has relatively priced in a rate hike and the current strength was merely due to safe haven interest given the Greece scenario?  Rumour about the dollar from President Obama was quickly crushed by the White House – however, it shows the fragility of this rally somehow. “

However, we remain cautious on any rally that gold is doing and will scale out should it hit resistance levels.

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

Daily Resistance Levels:

  • 1189 and 1197 are next target
  • DMAs 200 at 1209 / 100 at 1204 / 50 at 1197 and 20 at 1196

Daily Support Levels:

  • 1163 and 1176

Despite this morning positive outcome, we are not convinced that Silver is making any major breakthrough. We are repeating ourselves here – last rallies on Precious metals has been led by Silver and only if we see a major movement upward then we are convinced that a swing low is in. However, we are looking to cover our short on a break of 16.40 and look to go long if the breakout comes with a force.

Failure to break and close above 16.40 then silver prices could head back to test for support at 15.70-15.80 levels. Failure below will then take us to look for the purple line as next key support.

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

Daily Resistance Levels:

  • 200 ma at 16.76, 100 ma at 16.59, 20 ma at 16.75, 50 ma at 16.50
  • Upper BB line at 17.75

Daily Support Levels:

  • Lower BB at 15.86 and previous low at 15.90

Our bias remain for a relief rally here with resistance at 20 DMA and should price failed to break and close above then we could well see a repeat as shown on the chart (box 1 and box 2). Platinum is still bearish and sellers continue to dominate unless we see a big shift in price action. Any long positions we have, we are raising stops to break even and look to close out around 1120 levels as mentioned in yesterday’s report “Remember to have a tight stop as we look to go long in this corrective rally.”

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

Daily Resistance levels:

  • 100 dma at 1159 / 50 at 1129 and 20 at 1127

Daily Support levels:

  • Lower BB line at 1077 and previous low at 1087.5

We have yet to see any pullback and at the rate it is going, a retest for support at the rising trend line may ease the selling temporarily. We might consider to place long on a confirmation of another green candle (see yellow box). Otherwise, we maintain a bearish view as Palladium play catch up with the rest of the metals mentioned above.

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 787 / 100 at 777 / 20 at 770 / 50 at 772

Daily Support levels:

  • 733 and 720

Economic Calendar & Fundamental Analysis

Wednesday 10th June

  • Comments by BOJ derails the USD rally – Yen strengthen
  • Commodities surged with gold leading the way (Risk off)
  • Asian shares continue to struggle (Risk off)
  • Eurozone data is not very encouraging – all come in worse than expected with French and Italian industrial production number in the red (risk off)
  • UK manufacturing production did not fare better (Risk off)
  • Not a lot of USD news to support a strong dollar (this week USD rotational play?)
  • BOE and RBNZ press statement followed by AUD employment change
  • All eyes are on Chinese Industrial numbers and Retail sales – this week been talk of additional Stimulus to come (PBOC under pressure)
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