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Top 3 charts this week: Silver, GBPJPY, JAP225

12:02 PM October 16, 2018
  • Silver prices recover, face the first test
  • GBPJPY breaks the downtrend line – has the market turned around?
  • JAP225 respects the key support after a steep sell-off

Precious metal prices have suffered for a much of this year under pressure from strong dollar and rising interest rates. However, they have recovered recently. There are some reasons behind it. First of all, both gold and silver have been extremely oversold by speculators (according to the CFTC data). That could make prices prone to a short squeeze in case of some positive news. Those could include weaker data from the US and we have had some: lower inflation and sales for September. Technically, silver prices have recovered after a period of accumulation and we can see that this price recovery is gathering pace. Furthermore a reverse head and shoulders formation can be spotted with the neckline exactly at 23.6% Fibo. This is the first barrier that separates this recovery from a true rally.

Silver prices recover but a decisive step is yet to be made. Source: xStation5

GBPJPY has been in a broad downward channel for much of this year, although the situation has changed recently. We may see that a downtrend line has been broken and the pair has set a higher high, possibly breaking a downward sequence. Prices were unable to break the 150 zone at first but a pullback was stopped at a trendline (this time serving as a support) and a major recovery from here could invigorate the bulls. The next few days will tell if that’s enough to propel the price above the 150 resistance.

GBPJPY could have ended the downward sequence but the 150 level needs to be broken as a confirmation. Source: xStation5

The Japanese stock market has been really weird this year, spending a lot of time in a consolidation. Things went even trickier from there as the JAP225 broke higher only to erase all the gains with a brutal speed. Crucially 22000 support zone worked again and for now this offers the bulls a chance to regroup. The 23000 resistance zone is between 38.2 and 50% Fibo so this area is – once again – the key resistance level.

JAP225 managed to regroup at 22000 points. Will the bulls make it to (and above) 23000 again? Source: xStation5

 

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