Equities: New extremes and a challenging opportunity set
Discover insights on the future of equity markets in Q1 2024 and navigate the potential recession with strategic investment choices.
Technical Analyst, Saxo Bank
Silver Spot XAGUSD closed below key support at $18.14 yesterday. Next support is at 16.95 and the 0.764 Fibonacci retracement at around 15.68. However, at the 1.382 projection of the July-August correction at 17.10 a minor bounce could be seen.
A close above demolish the current bearish picture short term XAGUSD needs to close above 19.45
Weekly chart shows how Silver has broken below the 0.618 retracement of Q2-Q3 2020 rally at 18.38 and the support at 18.14. Silver is on course to test key support at 16.95. However, a spike down to the 0.764 retracement at 15.68 is not unlikely.
To reverse this bearish picture a move above 20.85 is needed . First warning of that scenario to play out is if Silver closes above the steep the upper falling trendline
Gold Spot XAUUSD has broken back below its falling trendline. Tried but failed to break back above and is now hit by heavy selling.
0.618 Fibonacci retracement has been broken and Gold is fast approaching its key strong support at 1,860. A support that has been tested several time over the past couple of years.
A close below could lead to further sell-off for XAUUSD to break below the 200 weekly SMA and down to the 0.764 retracement Q2-Q3 2020 rally at around 1,600.
RSI is below 40 with no divergence indication lower levels are likely.
To demolish the bearish picture XAUUSD needs to close above 1,765. First warning of that scenario to play out would be gold to break above the steep falling trendline.
XAUXAG Silver seems to be the leading selling indicator illustrated by Gold/Silver ratio XAUXAG propelling higher reaching 1.382 projection of the July-August correction and 0.50 Fibonacci retracement of the 2020-2021 collapse at around $96. But there could be more upside for XAUXAG which seems to be trading in a wide raising channel.
If XAUXAG closes the week above 96 there is no strong resistance before around 101.84. A spike up to the 0.618 retracement at 130.45 would be likely. To reverse the strong uptrend a close below 86.25 is needed. First warning of that scenario to unfold would be XAUXAG to break below of rising trendline.
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