FOMC Dollar Priced In? Bullion Daily 17th June

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

Daily Update

  • End of the corrective rally could instigate a move lower
  • Failure to break above 1189 (38.2% Fib) and 1192 (suggest a weak corrective rally)
  • Only a break and close above 1205 and 1216 will indicate a bullish reversal
  • Bollinger band is converging for a potential breakout
  • As shown on chart above, BB converging with all the MA (June 2014) could replicate in current price action
  • RSI has not reach oversold territory yet
  • Envisage a retest of 1155 levels before a reversal higher?

Daily Update

  • We have to point out the resilient silver as it holds above 15.80 levels
  • However, we are still unsure if this is the bottom for a reversal or there are more rooms to test lower first
  • We will not pick the bottom but will wait for a confirmation
  • Note RSI has not reach oversold zone and this could be a potential bear flag formation
  • Note the Bollinger band is still heading lower and the daily Mas are rolling over(see 2015 Feb to Apr pattern that suggest further downside is in store)
  • Elliott Wave count suggest current price action is a wave 4 and wave 5 has yet to materialise
  • Silver need a strong green candle to negate further selling momentum
  • We are biased for one more leg down and could potentially target 15.60 and 15.30 levels

Not much has changed for Platinum as price momentum continues to remain weak and heading lower. Should the pattern play out, we envisage a new low at 1050 – 1065 levels is possible. Mind you, there is a lot of empty space below and the trend will dictate price action. In this scenario, the red channel line could act as a magnet within this downtrend line. Still holding 1/3 short position with stops at breakeven.

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

Daily Resistance levels:

  • 100 dma at 1150 / 50 at 1132 and 20 at 1109

Daily Support levels:

  • Lower BB line at 1068

Sellers are in full control with the low at 720 as potential target. Upon reaching that level, we will maintain the view that it may rebound on a corrective rally. Recent price action has deviated away from the 20 DMA and should a corrective rebound plays out then we expect a reconnect. Without any confirmation, we will not take any positions.

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

Daily Resistance levels:

  • 200 dma at 783 / 100 at 775 / 20 at 758 / 50 at 769

Daily Support levels:

  • 723

Dollar index is stalling and may continue to range trade despite a lower high and lower low. We might get further clarification from the FOMC statement that will dictate the next direction. The viable projection is for a rally on the promise of a September rate hike but any hint of delay or cautious tone to a dovish one will drive the index lower. Saxo Bank highlighted the US bond yield has retraced lower – possibly due to positioning for FOMC.

Ever since the Fed initiated its tapering policy, the dollar has been bought since April 2014 and peaked on March 2015. That is equivalent to 11 months of buying spree on the promise of better economic data and a gradual rate hike. A healthy bull market often retraces to test for support and we might get one here. Lately, we have the dollar index rallied on the back of better than expected economic data but then gave back all its gain. Our question to the dollar bull – will this set precedence? Has all the expected and known been priced in?

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s