Global Risk On – Inter Market Analysis

NO UPDATE THIS FRIDAY

4 hour

No change in our short term outlook here as dollar index found support and may well consolidated ahead of NFP numbers. Friday data will then set off the next directional move. A good NFP numbers could send the dollar stronger while a bad numbers may send the bulls out the exit door again.

Weaker dollar index post FOMC statement does not instil confidence among those in the bull camp. Currently, price action found support at 38.2% retracement for a mini bounce before another pullback lower.”

German Bund

Daily

4 hour

We will stick with our previous thought process here and look for pullback as long opportunity. The bunds look set to create a base and a third retest with a tight stop is the preferred long trade.

Bunds did as we envisaged, found support off the lower Bollinger band of the 4 hour chart and the 100 ma. Price action is consolidating and could play out a recovery for higher prices. We have marked on the 4 hour chart potential entry for long at 156.58 with a tight stop to target previous high.”

Eur/Usd

Daily

4 hour

This is a one way street and it is going lower until we cannot find any new sellers. Stan Druckenmiller made it very clear that currency trends for 2 to 3 years and Euro is only halfway through this phase (although he remains flexible).

Sellers look desperate here trying to find new sellers to take on their positions. It may be too early to go against the trend but it is growing likely that we could see a reversal in play. News from this Friday NFP data could certainly create the catalyst for the next directional play.”

German Dax

Daily

4 hour

No change here unless we break below 10680 to invalidate the move higher for a small pullback. The current thesis is that we could see a weak euro – this will fit in with higher dax before a more severe sell off. The high at 10920 stands out as it is close to psychological level of 11000 but higher target of 11200 is still valid.

Dax broke higher as lower time frames suggest an small inverse head and shoulder with a target of 10920 that was reached. There is no questioning that Dax can still target 11100 to 11200 in the next few weeks. Daily price action could play out a wave 4 pattern here before one more spike higher or a complete AB=CD formation. “

Gold

Daily

4 hour

Seller dominates the gold market and the reversal is back on – hedge funds unwinding from their long positions as we close the month of October. Price action suggest that we are due to see minor support at 1118 to 1125 levels if gold is to trade within the bigger bear flag formation. Otherwise, a pullback as deep as 1104 remains in the card and we could well see a head and shoulder formation that target lower number.

Post FOMC statement gave the dollar big boost and with gold spiking as high as previous resistance zone at 1182. Sellers re appears on the news that the Federal Reserve is considering a rate hike in December. Equities rally and safe haven commodities are sold off.”

Silver

Daily

4 hour

Silver hold a slim chance for a reversal if we get the daily price action to post a green bar as it has potential for an inside day. A decent risk reward for a small long around 15.05 – 15.25 levels to target a pullback higher. A break below 14.75 will invalidate this and we will head lower.

We continue to analyse silver price action in a simple manner. As long as it break and hold below its daily 20 ma, price could continue lower and if we drill into the weekly chart, silver have had a stab at the top of the Bollinger band to then fail lower. The spike was what we have waited for and the momentum should carry the white metal lower. Any pullback higher is a selling opportunity.”

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