Free Profitable Forex Newsletter
Hey! This is Philip with this week's Fx update of the Free Profitable Forex Newsletter!
Markets remain broadly range-bound and in anticipation mode as everyone braces for the US election early next month and for new restrictive measures around the world to curb the second wave of the COVID-19 pandemic.
While I still expect the dollar to strengthen somewhat more into and around the November 3 US election, it is not a view anyone can hold with a high degree of confidence. On balance, many uncertainties cloud the outlook over the next few weeks. Hence, the best thing to do in times like these is staying away from the market and waiting for the right opportunities to come.
Last week we said the same, and the suggestion we gave that EURJPY is likely to move down worked nicely. And, the pair is indeed falling this week. However, the outlook still suggests sideways ranges across Fx pairs are most likely to persist, and EURJPY can stop and consolidate as well.
With all that being said, let’s now look at some charts and see where the fun could be once the ranges break. Gold and Silver look most interesting right now, particularly because the technicals have aligned nicely, giving us clear tradable levels for when the opportunities come.
Fx traders should also take note that precious metals and commodities, in general, are much more volatile than currencies. That means your positions (lot sizes) should be adjusted accordingly to avoid potentially large swings in your equity curves. Traders should be especially careful when trading commodities with leverage.
Gold & Silver Technicals Remain Near-Term Bearish
The technical pictures are very similar on both Gold and Silver at the moment. Both are trading inside of a downward retracement channel to the predominant bull trends from earlier, and both recently tested the resistance trendline of these channels.
Both Gold and Silver also formed bearish candles at the resistance. Thus, the technicals are currently pointing to a lower low than the previous one (from September 24-25) in both precious metals.
Key technical resistance in the immediate term is the 55-day moving average, while key support is at the 100-day moving average (again on both XAU/USD and XAG/USD).
$1800 area is the probable first target for the next leg down in Gold. There is a possibility that Gold extends even lower, toward $1750 and $1700.
For Silver, on the other hand, the $20-$19 area is likely to prove a strong support zone that won’t be broken easily. While it could be tested lower, e.g., toward $18, it’s highly improbable that it will be broken as part of the retracement. In case it is, it would threaten the whole bull trend that started at the March lows. And it’s highly unlikely that the major bull trend
in Silver is done.
In the opposite scenario, if Gold and Silver break the retracement channels to the upside, then prices may soon be headed quickly higher again. Under this scenario, the metals can easily test the record highs from August or even surge to new all-time highs.
Trade signals from the past week
- October 1 - Short EURUSD at 1.1750 - 1.18 resistance area - not triggered as pair enters range and setup canceled now
TOTAL: N/A in the past week
TOTAL: +3055 pips profit since October 1, 2018
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High Risk Warning: Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.
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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