Article originally published on innerfx.com and republished here with permission
Quote of the day:“Intuition isn’t the enemy, but the ally, of reason.” ~ John Kord Lagemann
Good morning. I took a day off yesterday but now I’m back in business. World markets fall after weak US employment numbers and the dollar is strengthening against some of its counterparts, except for CHF which is recovering recent losses and JPY – which is pretty much flat. Gold is trading at fresh record highs while writing this report and silver is also following higher – aiming towards recent high at 44. Let’s take a look at some of the most interesting charts these days:
It’s just getting uglier as key support zone is under pressure these days. This was a solid reversal point in the past few months, as the reversal candles suggest, but as long as the European markets are the most vulnerable, it’s quite unlikely that we’re going to see a large correction towards recent highs, but rather some more weakness. Selling on potential rallies is probably the best thing to do, while upside is capped by 1.43 – yeap, I know it is quite far from here.
There isn’t much to say here, really. I am expecting a test of 2000 before the next correction/leg down.
Gold Daily Chart 9-6-2011
Friday’s breakout was really nice, as expected and noted in my report – that was just one of my favourite setups: when price is silently testing resistance, consolidating in a tight range, waiting for the main catalyst to drive the market higher – and that was the NFP.
Silver Chart 4hrs 9-6-2011
After a strong correction, we finally see a reversal candle suggesting that the downtrend may resume. Interim support is currently formed around 97, so this is the region where I’m looking for a selling opportunity if support breaks. It’s also worth keeping an eye on the 99 zone where the reversal candle was formed, as it could be a false signal resulting in a buying opportunity around the said level.
Swiss Franc Vs Japanese Yen Chart 4hrs 9-6-2011
The euro is again in free-fall mode against the Swiss franc and the support zone around 1.12 was breached, which means that it’s likely to provide resistance if price pulls back from here. Until SNB’s next action (if any) – buying EURCHF is not the best option.
Euro Vs Swiss Franc Chart 4hrs 9-6-2011