COMMODITIES: Precious Metals Fall Sharply, Crude Ticks Higher
- Precious metals sold off sharply on Tuesday, with spot gold currently down by 5.6% at $4,113/oz and silver down by 7.7% at $48.4/oz, albeit off session lows. Platinum and palladium have also fallen by 5-6%.
- There was no obvious trigger for today’s weakness, which has allowed an overbought condition to swiftly unwind.
- As noted earlier, the moves have been largely isolated to precious metals, supporting the idea that they have been flow/momentum driven, with profit-taking at play after an extremely strong rally since August.
- For gold, today’s losses have rapidly narrowed the gap to key support at $4,030.4, the 20-day EMA. A break of this would open $3,819.6, the Oct 2 low.
- For silver, the move unwinds some of the recent liquidity squeeze, with price piercing initial support at $49.037, the 20-day EMA. A clear break of this level would open the next support at $45.135, the 50-day EMA.
- Elsewhere, WTI has risen today, having recovered from earlier losses. Geopolitical developments weighed against the supply/demand outlook as seaborne crude in transit continues to rise.
- WTI Nov 25 is up by 0.5% at $57.8/bbl.
- Despite the move, a bearish theme in WTI futures remains intact, with sights still on $54.89 next, the May 5 low. Initial firm resistance is seen at $61.61, the 50-day EMA.
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EURJPY TECHS: Uptrend Intact
- RES 4: 177.08 2.000 proj of the Feb 28 - Mar 18 - Apr 7 price swing
- RES 3: 175.43 High Jul 11 ‘24 and a key medium-term resistance
- RES 2: 174.86 1.764 proj of the Feb 28 - Mar 18 - Apr 7 price swing
- RES 1: 174.50 High Sep 19
- PRICE: 173.83 @ 20:30 BST Sep 19
- SUP 1: 172.92/171.75 20- and 50-day EMA
- SUP 2: 169.73/45 Low Jul 31 / 23.6% of the Feb 28 - Jul 28 bull leg
- SUP 3: 168.46 Low Jul 1
- SUP 4: 167.46 Low Jun 23
The trend set-up in EURJPY remains bullish and last Thursday’s gains reinforce current conditions. The cross breached resistance at 173.97, the Jul 28 high and a bull trigger. This confirms a resumption of the medium-term uptrend and maintains the price sequence of higher highs and higher lows. Sights are on 174.86, a Fibonacci projection. On the downside, first support to watch lies at 172.92, the 20-day EMA.
USDJPY TECHS: Bullish Reversal Signal
- RES 4: 151.62 61.8% retracement of the Jan 10 - Apr 22 bear leg
- RES 3: 150.92 High Aug 1 and a key resistance
- RES 2: 149.64 76.4% retracement of the Aug 1 - Sep 17 bear leg
- RES 1: 148.28/149.14 High Sep19 / High Sep 3
- PRICE: 147.95 @ 20:15 BST Sep 19
- SUP 1: 145.49 Low Sep 17 and a pivot support
- SUP 2: 145.40 50% retracement of the Apr - Aug upleg
- SUP 3: 144.10 61.8% retracement of the Apr - Aug upleg
- SUP 4: 143.45 Low Jul 3
USDJPY recovered sharply from last Wednesday’s low. A bullish candle pattern on Tuesday - a hammer formation - provided an early reversal signal. On Wednesday, the pair breached a number of important short-term support levels, however, this has not confirmed a bearish threat. A continuation higher would open 149.14, the Sep 3 high. Pivot support is 145.49, the Sep 17 low.
EURGBP TECHS: Bullish Structure
- RES 4: 0.8800 Round number resistance
- RES 3: 0.8769 High Jul 28 and the bull trigger
- RES 2: 0.8744 High Aug 7
- RES 1: 0.8729 High Sep 19
- PRICE: 0.8722 @ 20:01 BST Sep 19
- SUP 1: 0.8643/8597 50-day EMA / Low Aug 14 and the bear trigger
- SUP 2: 0.8562 50.0% retracement May 29 - Jul 28 upleg
- SUP 3: 0.8540 Low Jun 30
- SUP 4: 0.8514 61.8% retracement May 29 - Jul 28 upleg
Recent weakness in EURGBP has been corrective and last week’s recovery confirmed the end of the corrective phase. Support to watch lies at 0.8597, the Aug 14 low. Clearance of this level would cancel a bull theme and reinstate a recent bearish threat. For bulls, the resumption of gains opens 0.8744, the Aug 7 high. Key resistance and the bull trigger is at 0.8769, the Jul 28 high. First support is 0.8643, the 50-day EMA.
