Evening team!

We are taking another look at metals, however turning our attention to silver. There has been a number of technical patterns indicating a bullish phase to the upside should unfold over the next couple of days. The weaker DXY is also playing into higher metal prices.

SILVER Daily Chart

The MACD has crossed over the the upside after a pro-longed period of selling pressure. There is also a major support zone coming into play at the 20.60 area.

There is also an inverted head and shoulders structure in play indicating a bullish move to the upside.

BUY Market execution, current price 21.70, stop loss 20.70 and take profit zone 23.63

Stop loss: 100 pips

Take profit: 193 pips

Good morning team,

We are taking a second crack at gold based on the technical zone the metal is trading at. Overnight the US reported another increase in inflation, therefore the “real interest rate” is moving further into the negative territory, despite the recent rate hike from the FED.

During the last FED meeting, Jerome Powell stated they would not be looking at rate hikes larger than 0.50%, therefore this should provide some fuel for gold to move higher.

GOLD and the USDJPY generally have an inverse correlation. The USDJPY is breaking down from a rising trendline support with a bearish divergence. Therefore this supports higher gold prices in the short term at least.

USDJPY Daily Chart

GOLD Daily Chart

There are 2 key trend lines coming into play at the 1850 support level, and the RSI and MACD are reaching oversold conditions.

GOLD 1 Hour Chart

Trade Setup: BUY market execution, current price 1853, stop loss 1831 and take profit 1890. 

Stop loss: 220 pips

Take profit: 370 pips

If the trade moves as expected, there is a chance of running the take profit higher.

Good morning team,

After the wick down on the GBPUSD, I wanted to wait until post-FED announcement before positioning in the market.

Whilst the FED raised interest rates by 0.50%, they also stated that they were not looking at more aggressive rate hikes in the coming meetings. This has put a cap on the year-end target for interest rate hikes.

With this in mind, and inflation remaining high, it has created a bullish environment for GOLD. Especially considering the recent sell-off across metals. We see the recent decline as corrective and has possibly reached a bottom.

GOLD – 4 Hour Chart

Trade Setup: BUY market execution, current price 1886, stop loss 1860, take profit 1944.

Stop loss: 260 pips

Take profit: 580 pips

Good evening team,

Fairly quiet start to the trading week with low volatility across the board. We are expecting volatility to pick up leading into the end of the week due to a number of high impact risk events. We are sticking with our pending orders on the USDCHF and EURCHF for the time being and also have positions running on the USDCAD and PAYPAL which is moving in the right direction.

On the fundamental side, the Pentagon plans to order and send to Ukraine 10 of the newest model Switchblade drones armed with tank-busting warheads in addition to previously announced deliveries of a less powerful version, according to two people familiar with the decision.

The new Switchblade-600 weapons are part of $300 million deal in lethal military assistance announced by the Pentagon Friday night, that will be contracted directly from industry instead of drawn from existing stocks, according to the people, who asked not to identified discussing the plan. Whilst the financial markets are continuing to run to the upside, the conflict in Ukraine is still very much heating up. With the ongoing conflict, we see metals as a possible opportunity, especially due to the counter trend declines on silver and gold.

SILVER Daily Chart

There has been a return to the scene of the crime on silver with a classic retest scenario.

SILVER 4 Hour Chart

There has possible been an ABC correction (3 wave decline), followed by a higher low inside a bull flag structure. We are looking to go long on the bull flag breakout for a run into 26 and 27 initially.

Trade Setup: BUY STOP – entry price 24.90, stop loss 24.00 and take profit 26.00-27.00

Stop loss: 90 pips

Take profit: 110-210 pips

Updated Position: 23rd March 2022 (cancel the BUY STOP placed yesterday)

Trade Setup BUY market execution, current price 1923, stop loss 1898 and take profit 1970.

Stop loss: 250 pips

Take profit: 470 pips

Afternoon traders,

All commodities have faced a period of consolidation and downside pressure as traders reduce long positions and potentially look for shorting opportunities from the major resistance levels. This theme has been constant on gold and crude oil. The fundamentals have not changed, inflation is expected to continue rising due to supply chain issues, the conflict in the EU is still ongoing, therefore we are looking to ride gold higher. Technically speaking, gold has potentially completed an ABC corrective decline. We can count a 5-3-5 structure and buyers are stepping back into the market at these levels. We should at the minimum see a 3 wave rally higher, at the moment there has only been a 2 wave move to the upside.

Trade Setup: BUY STOP – entry price 1941, stop loss 1916, and take profit targets 1971-2000.

Stop loss: 250 pips

Take profit: 300-590 pips

Morning team,

There has been some whipsaw action across USD pairs overnight due to the inflation data early hours this morning. We are looking to reposition here on SILVER and possibly get ready for a short trade on Crude oil. The DXY has seen a sharp upturn due to inflation rising to 7.5% on a yearly basis in January which was above the market forecast of 7.3%. CPI was up 0.6% on a monthly basis which also exceeded the forecast. The US 10 year Treasury bond yield surged to fresh long-term highs, touching the 1.98% region for the first time since August 2019. After the report, the expectations for a 0.5% rate hike by the Federal Reserve in March have exceeded 53%. Before the release, expectations were around 30%. Rising inflation tends to provide a positive reaction for metals, however as interest rate hike bets are rising, downside pressure can also come into play. This is because the “REAL INTEREST RATE” will be rising higher. A decrease in USD strengthens the currency and has an opposite impact on metals due to the inverse correlation.

Silver has set up a nice bearish technical pattern and we are looking to get into the market on the short side.

SILVER 4 Hour Chart

We can count a five-wave decline which indicates a bearish trend, followed by a counter-rally higher. We traded gold higher earlier in the week which is also following a similar setup.

There is also a head and shoulders formation in play which is a bearish technical signal.

Trade Setup: SELL market execution, current price 23.18, stop loss 23.86 and take profit targets 21.

Stop loss: 68 pips

Take profit: 218 pips

Good evening team,

Nice win on the EURJPY, can’t complain at the TP being hit. Slightly frustrating with the size of the move to the upside, I really didn’t see that large of a move to the upside taking place. On to the next trade!

As you know from the analysis I have been posting on gold and silver, I see the metals taking a turn to the downside over the next couple of weeks, with gold hopefully reaching 1720-1730. This is mainly due to central bank policy, which is removing money from circulation and puts downside pressure on metals (in the short term). However the recent technical structure on gold suggest the metal should reach the 1830 resistance before turning south. I am looking to trade the corrective rally tonight leading into the US NFP and unemployment data. The decline in the DXY should help metal prices in the short term due to the inverse correlation. Keep in mind, I am still in the bullish camp for gold LONG term. Once the metal reaches the 1720-1730 support levels we will be looking to buy if the correct setup presents itself.

GOLD Technical Analysis

Trade Setup: BUY market execution, current price 1807, stop loss 1788 and take profit 1830

Stop loss: 190 pips

Take profit: 230 pips

Good morning team,

The FED interest rate decision this morning played out as expected. Although interest rates have remained on hold for the time being, the FED has flagged possible rate hikes “soon” and plans for significant balance sheet reduction. The Federal Reserve on Wednesday signalled it is likely to raise U.S. interest rates in March and reaffirmed plans to end its bond purchases that month as well before launching what was characterized as a significant reduction in its asset holdings. The combined moves will complete the Fed’s pivot away from the loose monetary policy that has defined the coronavirus pandemic era and toward a more urgent fight against inflation. The DXY has surged higher and looks set to move into new high territory. This should result in further pressure on USD pairs as well as metals due to the inverse correlation.

We are turning our attention to SILVER and are also watching GOLD for a breakdown play.

SILVER Daily Chart:

The rise from 21.47 to 24.69 is only in 3 waves, based on the Elliott wave principle this is a corrective rally, also known as a counter-trend. Price should now move lower and exceed the 21.47 low. We are looking to target the bottom of the falling channel structure.

Trade Setup: SELL market execution, current price 23.47, stop loss 24.69 and take profit target 19.72. 

Stop loss: 122 pips

Take profit: 375 pips

Key Chart: GOLD – Gold is still on our watch list for a move towards the 1720 region.

Good morning team,

Gold has broken out of a bull flag structure during a bullish trend over the past week, we are expecting a continuation to the upside whilst the DXY is heading lower. The majority of commodities are pushing to the upside this morning playing into the bullish bias here on gold.

GOLD – 4 Hour Chart

The 1830 resistance will be our initial target zone for our long trade due to the previous rejections.

GOLD 1 Hour Chart

Bull flag breakout along side an inverted head and shoulders formation.

Trade Setup: BUY market execution, current price 1801, stop loss 1783 and take profit 1830.

Stop loss: 180 pips

Take profit: 290 pips