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US Dollar Index, Gold And Silver: Technical Update

US Dollar Index [I.USDX]

Although, medium-term descending trend-line, near to 100-day SMA, confined a month-old upward trajectory of the US Dollar Index (I.USDX), the greenback gauge bounced-off from 38.2% Fibonacci Retracement of December 2015 – May 2016 slide on Thursday and is again trying to conquer the same 95.80 – 96.00 region ahead of the crucial US Job details. Given the upbeat labor market numbers, the index could well surpass the 96.00 mark and can head to 96.60 with 50% Fibo level of 96.25 being an intermediate halt. Should it manage to clear the 96.60, the 97.00 and the 61.8% Fibo number of 97.30 are likely following resistances for the index quote to print. Alternatively, unpleasant job figures could drag the index to 95.20 and the 95.00 immediate supports before making it test the 50-day SMA level of 94.60. Moreover, a sustained downside below 94.60 could further weaken the gauge towards visiting 94.30 and the 93.80 supports.


Having breached three month old ascending trend-channel, Gold prices dropped below 100-day SMA for the first time since late-January; however, the metal continue to struggle between the 38.2% Fibonacci Retracement of its December 2015 – May 2016 up-move, at 1205, and the 100-day SMA level of 1222 since then. Should the US labor market details strengthen the USD, the bullion prices could dip below 1205 immediate rest and can aim for 1195 and the 1180 supports. During its further decline below 1180, the 50% Fibo level of 1174 and the 200-day SMA mark of 1164 are important downside numbers for the bullion traders to watch, which if broken can magnify its southward trajectory towards testing 61.8% Fibo level of 1145. Meanwhile, an upside break above 1222, backed by pessimistic job numbers from the US, could propel the prices to 1227 and 1234 resistances before enabling the precious metal to confront 23.6% Fibo level of 1243. If the prolonged USD weakness and further safe-haven buying extends the Gold buying spree above 1243, chances of its rally to 1258-60 resistance-zone can't be denied.


While a sustained break of 50-day SMA and 38.2% Fibonacci Retracement of December 2015 – May 2016 advance dragged the Silver prices to seven week lows, an upward slanting trend-line, connecting the lows marked in January and April, triggered its bounce towards 16.15 immediate resistance. Given the metal surpasses 16.15 mark, 38.2% Fibo level of 16.35, followed by 50-day SMA level of 16.45, are likely consecutive resistances it could face before challenging the 16.70 and the 23.6% Fibo level around 17.00. On the downside, 50% Fibo level and the mentioned trend-line support of 15.80 becomes important for Silver traders, clearing which 100-day SMA mark of 15.70 comes into play. If the industrial metal drops below 15.70, the 15.45 and the 15.00 could offer additional supports to its further south-run.

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Monday, 06 Jun, 2016 / 4:38

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