Metal markets showed how volatile they were overnight as both gold and silver had knee-jerk reactions on the charts. With China shaking up the global markets after the recent Yuan cuts and the reassurance today that China will not act aggressively when it comes to their currency we have seen a sharp sell-off of the hedging metals.
Gold has managed to find some slow momentum lower, but for the most part it's starting to turn bearish yet again. Support can be found at 1095.91 and I would expect to see gold tracking back down the charts in an effort to unsettle the recent buying spree, which to me looks more like unwinding of positions.
Silver on the other hand has been more pronounced in its turn around on the global markets. Certainly the pull back today was sharp and aggressive, and shows that it's not only at a turning point, but that markets also believe we are going to see further bearish action on the horizon. Support levels are looking primed and ready at 14.356 and a test of this area will be a true market mover on the horizon. I would expect if we did see a bounce back we would get a double bottom scenario and a reversal up the charts fairly quickly.
The UK economy got some relief today as CPI data came in stronger than expected at 0.1%, which surprised the markets but was in line with the previous comments made from the Bank of England which expected inflation to pick up in the coming months. Now despite this result the fall in oil markets will have some impact for the most part so don't expect it to be all smooth sailing for now.
Either way we saw a strong jump on the charts to come up just under resistance at 1.5660. If we see further good news for the UK economy we could see a push higher after all the consolidation on the charts and see if things really get interesting at 1.5790. With the current waves though Fibonacci levels could offer some great opportunities to really play of those key levels the market has been buzzing about.
Finally the S&P 500 has been looking very good on the charts, as it looks to consolidate. Now for many they will be asking well if there is no trend why bother, in this case it's worth noting the levels and looking for breakouts. I certainly feel that with the consolidation period we are going through it's a matter of time before we see further swings higher up the charts; even if we do get some good news out of the FED.
The resistance level at 2121 is currently my key option for aggressive bullish plays, and targets above this will be set quite high in terms of liquidity. I would also watch for Fibonacci levels here on waves back down as we have seen time and time again the market look for these technical plays in the short to medium term as well.
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