Free Profitable Forex Newsletter
Hey! This is Philip with this week's trade idea of the Free Profitable Forex Newsletter!
Silver Ready To Breakout Higher?
Precious metals had a great bullish run over the past 6 - 7 weeks. Risk aversion and a turnaround in the Dollar were the main drivers of the rallies in Gold and Silver prices.
The strong uptrends are still clearly in place. Gold and Silver are in a consolidation pattern for the past two weeks, and a bullish breakout of the ranges would be a sign for further gains here. We are also seeing USDCNH pushing higher again this week, which is an additional sign that risk aversion remains in the driving seat for markets. That could also support another bullish leg in Silver.
Big Risk Event Today: Powell's Jackson Hole Speech
Today (and this whole week) is all about Fed President Powell’s speech at Jackson Hole, where he is expected to provide clarity on the plans for Fed policy.
Expectations for what the Federal Reserve should and will do are mixed - with wide disagreements among economists and investors. Markets will undoubtedly move when Powell speaks later today, and he can easily send the US Dollar flying higher or tumbling lower.
For Gold and Silver, however, it is a bit more tricky to decide what the reaction will be in the different scenarios during and after Powell’s speech. That is because of their safe-haven characteristics.
If, for example, Powell is hawkish that could be bearish for Gold (XAUUSD) and Silver (XAGUSD) because the Dollar will rise. But on the other hand, a hawkish Powell could also trigger an even stronger risk-off reaction - which will be bullish for both Gold and Silver due to worsening risk sentiment.
Technicals Are Crystal Clear
Given the clarity of the technical picture at the moment (especially on SIlver), it is best to trade such uncertain risk events when a breakout in one direction (that is somewhat backed by fundamentals) occurs.
Silver is in an uptrend and inside of a triangle consolidation pattern at the moment. The technical situation is crystal clear, and, bullish. A breakout above the trendline will signal more of the same bullish price action to come with the probable destination being toward the upper trendline of the channel (as shown in the chart below).
We must not forget that the trend can reverse also. That will happen if Silver breaks below the support trendline which currently sits around the $17.00 level. This could then trigger a bigger bearish move that could easily take the precious metal toward the $15.90 lows that were formed at the start of this month.
In either case, the clear technical situation suggests that good, tradable opportunities will exist and we should be ready to take advantage - either from the bearish or bullish side.
The details of the technical analysis are shown on the chart below:
Entry: Look to enter either a bullish or bearish position
Stop loss: Place stops accordingly
- Bullish scenario - Below the $17.00 support for buy trades
- Bearish scenario - Above the $17.15 resistance for sell trades
Targets:
- Bullish scenario - Toward the $18.50 top of the range (projected leg indicates that the target could be reached toward the end of August / beginning of September)
- Bearish scenario - Toward the $15.90 - $16.00 support area
Trade signals from the past week
- Entered August 14, 2019 – Short EURUSD from 1.1150 (in progress: +100 pips in profit at the moment) – trade signal sent on Friday, August 9
- Entered August 16, 2019 – Long USDCHF from 0.9785 (in progress: +90 pips in profit at the moment) – trade signal sent on Friday, August 16
TOTAL: +0 pips in the past week
TOTAL: +1185 pips profit since October 1, 2018
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Any opinions, news, research, predictions, analyses, prices or other information contained in this newsletter is provided as general market commentary and does not constitute investment advice. FX Trading Revolution will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
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