Rejoice as Greece does not need to exit the Eurozone. Equity market traded higher on the back of this stability and regardless of the outcome, the market kept making record high in this mania phase. That is despite a high number of unemployment and lack of economic reforms, investors are piling in to the QE-backed stock market.
Financial media continue to pour oil into the fire, comparing the recent high in equity market to the years of technology boom as well as the most recent CDS catastrophe. One has to ask what is so bad about this mania phase since any Tom Dick and Harry can make tonnes of money simply by buying into the equity market.
Meanwhile, Central Banks around the world has taken currency war to a new scale. The start of 2015 has brought the fear of deflation to the global economy. Cutting interest rates and promising big QE could be the only solution for some time. Reducing real unemployment on the other end is totally a separate issue given the robust economic (fabricated) data.
The US Dollar strength continues to be the spotlight in the currency market. With the Federal Reserve holding to maintain market expectation of the first rate hike after so many years, currency against the USD is simply at the mercy of Miss Yellen’s speeches. As we enter March 2015, there is a growing pressure for the Fed to “do something about it” scenario. No doubt it is a mounting pressure for Miss Yellen to deliver.
Gold Technical Outlook
Despite the flurry of economic data and central banks speeches, the yellow metal tested the rising trend line and found support at $ 1190.60 before rebounding to test $ 1220. There are a lot of stops at $ 1190 and a break below could trigger a fall to $ 1168 as the next ideal support. However, we see that a rebound to $ 1239 is possible to create a potential RHS right hand shoulder of this Head & Shoulder pattern. We will continue to sell any rallies while changing our open trade stop loss to $ 1248.
|
Trade: Any rallies are opportunities to Short XAU – short positions for $ 1206 to $ 1216 area with a stop loss at $ 1226 changed to $ 1248 for various key targets. Looking to add short if gold rallies higher. Valid for this week only. |
|
Contract |
Valid Date |
Price |
Action |
Stop Loss |
Target |
Results |
|
XAU |
23rd – 27th Feb |
1206 |
Live |
1248 |
1189 |
|
|
XAU |
23rd – 27th Feb |
1211 |
Live |
1248 |
1177 |
|
|
XAU |
23rd – 27th Feb |
1215 |
Live |
1248 |
1160 |
|
20 WMA |
50 WMA |
100 WMA |
|
1216 (+/-) |
1257 (-3) |
1291(-4) |
Silver Technical Outlook
XAG/USD continues to post a bearish outlook and rallies are selling opportunities. We respect the new trend lines that point to much lower prices after last week rejection to break higher. We continue to see $ 16.10 and $ 15.55 as potential targets for the bears to target before any real possibility of rebounding. Daily chart use of trend lines as well as reading of the candlesticks biased for further downside. This is despite divergence showed on the RSI which is holding on the rising trend line at 43. Break below this RSI will give the bear more selling rooms.
|
Trade: Short at $ 16.70 to $ 16.80 area with a stop at $ 16.95 to target lower numbers. We will reduce risk by moving stop loss to our entry price for now. |
|
Contract |
Valid Date |
Price |
Action |
Stop Loss |
Target |
Results |
|
XAG |
23rd -27th Feb |
16.70 |
Live |
16.70 |
16.10 |
|
|
XAG |
23rd -27th Feb |
16.80 |
Live |
16.80 |
15.55 |
|
20 WMA |
50 WMA |
100 WMA |
|
16.71 (-1) |
17.59 (-8) |
18.83 (-6) |
Platinum Technical Outlook
As per last week commentary “With the MACD crossing lower and a falling stochastic, we cannot rule out much lower prices. Despite that, we could see a slight rebound to test what was support now resistance at $ 1170 and $ 1184 area before resuming lower.”
Weekly chart is slightly mixed given that the RSI bounced off the support rising trend line (see chart below) and the stochastic fast line could move higher if prices buyers flock in to test $ 1296. Next week could see further consolidation as the shorter time frame (4 hour chart) has resistance at $ 1192 area. Potentially prices could return to test $ 1154 area.
|
Trade: Side line for now although we see a potential short lived rebound before resuming lower. |
|
20 WMA |
50 WMA |
100 WMA |
|
1218 (-4) |
1339 (-6) |
1385(-4) |
Palladium Technical Outlook
Palladium is by far reacting higher and this week price action promised some pullback to $ 780 area before the bull resume higher to retest $ 823 area. If this range continues, the bounced off at $ 765 area will give a reason for trader to aim $ 808 and $ 823 level which is the upper range. Only a break below $ 730 will favour us shorting the metal.
|
Trade: Pullback is an opportunity to enter a long position with a tight stop loss. |
|
Contract |
Valid Date |
Price |
Action |
Stop Loss |
Target |
Results |
|
Pd |
2nd – 6th March |
$ 786 |
Order Placed |
776 |
826 |
|
20 WMA |
50 WMA |
100 WMA |
|
785 (+1) |
811 (+1) |
766(+/-) |
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