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Spot silver collapsed overnight and is currently over 5% lower from the 16:00 equity cash close. Silver is also now 13.2% from the recent high in late August in USD terms.
USD/JPY fell to a low of 99.02, although found buyers at the 100-day moving average at 99.04. The pair recently broken out of a multi-month symmetrical triangle, arguing for a move above 103.00, however price action since the break is less than convincing. We would stay long providing the pair doesn’t close below the 100-day moving. At 14:30 today we get Japanese industrial production, while in US trade at 22:30 we get retail sales and 22:45 University of Michigan confidence numbers.
We highlighted this pair yesterday given the convincing break of the former March downtrend. The pair is finding buyers at the 61.8% retracement of the 1.1200 to 1.1660 at 1.1380, where a daily close below this level tonight should see the pair target the recent lows of 1.1200. Given the daily MACD is about to push below zero, we feel this will bring out new technical sellers and believe traders could look to sell rallies in the pair to the former downtrend at 1.1430.
Our suggested profit target on last week’s ‘one to watch’ was triggered at $1345, however gold continued to fall past this level, hitting a low of $1320.74 in US trade. Strong initial claims have been to blame, however it has to be said that gold was falling heavily well before this data point. Having closed below the 38.2% retracement of the $1337 to $1433 rally of late, the pair will now target the 61.8% retracement of this move at $1307. Short-term moving averages are all aligned and headed lower, thus momentum is to the downside. With the Fed likely to taper next week and the Syria conflict seemingly moving to the background, traders seem happy closing gold longs.
See spot gold chart below.
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