Technical Overview: Gold, Silver and US Dollar Index

October 09, 2015 13:51

GOLD

Irrespective of the yellow metal's failure to sustain $1142-45 important resistance break during early week, dovish FOMC minutes fueled the Gold prices on Friday towards the highest levels in more than a month, indicating an extended rally to 38.2% Fibo of its January - July decline, near $1165, and to the 200-day SMA, near $1178-80 area. However, the bullion is less likely to break the $1180, if at all it does, the metal prices can get a boost towards surpassing $1200 mark with 50% Fibo, near $1192, being intermediate resistance. On the downside, $1142-45 resistance-turned-support becomes crucial for the gold prices. Given a daily close below $1142, the prices could quickly test 23.6% Fibo, near $1130, and then declining to $1110 prior to revisiting the $1100 psychological magnet, also indicating the horizontal support. Moreover, inability to hold $1100 can make the metal prices vulnerable enough to plunge towards its July lows, near $1077 and ultimately testing $1030 support.

SILVER

Unlike Gold, which is heading towards its 200-day SMA test, the Silver prices couldn't surpass the said SMA during its early week rally and the same is restricting the while metal's immediate advance near $16.00 round figure mark. Should silver price successfully breaks the important SMA on a closing basis, chances of its quick up-move to $16.75, including 61.8% Fibo of January – August decline, can't be denied; though, 50% Fibo, near $16.25, can act as an immediate cap for the metal prices. On a further rise beyond $16.75, the metal's upward trajectory gets additional fuel to test $17.40 important resistance level, including 76.4% Fibo, breaking which prices can aim $18.00 on the upside. Alternatively, 38.2% Fibo, near $15.60, is likely nearby support that the metal prices can avail, breaking which 100-day SMA, near $15.25, becomes crucial to determine further moves of the white metal. If silver prices fail to stop its decline near $15.25, it can witness $14.90 and the $14.30 consecutive supports during its extended downturn.

US Dollar Index [I.USDX]

Ever since the greenback gauge reversed from its 93.30-20 important horizontal support, the 96.50-70 region kept restricting the upside of US Dollar Index. Currently, the index is near to the lowest level in three weeks, indicating further downside towards 94.50 and to the 94.00 round figure mark before re-testing the 93.30-20 horizontal mark. Should it fail to hold the crucial support area, it becomes vulnerable to quickly jump to the August lows, near 92.50, followed by the decline to 92.00 and 91.00 round figure marks. Extension of downside below 91.00 can magnify the index weakness to make it test the 90.00 psychological magnet. Meanwhile, the 95.40 can limit immediate advance by the index, breaking which the confluence of 50-day and 100-day SMA, near 96.00 – 96.10 area, quickly followed by the 96.50-70, are likely important upside levels that could control the index moves. Should it successfully breaks 96.70 on a closing basis, the 97.00 psychological level and the 97.80 are likely resistances that it could quickly aim for during its extended advance.

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