Autochartist - Latest Chart Patterns
Weekly discussion and analysis of chart patterns from our partners at Autochartist.
Weekly Commodities Update: Silver
Silver futures benefited from last week’s rally in the precious metals sector, pushing above $33per ounce briefly, after breaching the key level resistance. The Autochartist key level indicator has identified the $32.60 per ounce price as the key short-term level for the market to hold if the upside momentum is to continue into next week.
On a longer term timeframe, silver’s rise above the key level resistance at $32.60 per ounce completed a successful retest of major resistance at the $33.80 level. This swing higher confirmed the development of a channel-up chart pattern, identified here on the Autochartist 240-minute time interval.
Once the retest occurred, the price fell back and settled on Friday at the short-term key level, which will now act as minor support. A move below this level would set up a potential sell-off to the bottom of the channel-up pattern. This support level currently rests at $31.40 per ounce, as indicated by the chart analysis pictured here.
The range inside the channel of more than $2 per ounce makes this pattern a good candidate for swing trading, as the price gyrates inside of the zone while the pattern fully develops. Selling failures at the key resistance levels while buying retracements from the well-established support can allow for short-term entry and exits as traders await a long-term directional trend to reassert itself.
While the potential remains high for much higher prices in the long term, the chart will need to overcome the $1690 resistance to confirm the lows have been achieved. The breakdown below the pennant support after the last move through this pivot point leaves gold poised for a slide to new lows for the month. If the selling pressure carries over from last week, the projected price range places gold between $1634 and $1658 per ounce.
Overall, a move above the channel-up pattern’s resistance with follow-through above $34 per ounce would signal a bullish upside breakout, and may bring sustained buying interest back into the market for an eventual retest of the $40 level. Conversely, acceleration of the pullback from the channel resistance could result in a breach of the $31.40 support. This would be a signal for a downside breakout and a trend lower on the horizon.
Weekly Forex Update: AUD/USD
AUD/USD continues to advance inside the highly uniform triangle chart pattern. The overall quality of this chart pattern is measured at the five-bar level as a result of the below average initial trend (four bars), substantial uniformity (eight bars) and lower clarity (two bars). This chart pattern continues the predominant uptrend that can be seen on the daily, weekly and the monthly AUD/USD charts. The high uniformity of this chart pattern reflects the even distribution of the reversal points which formed the upper and the lower trend lines of this triangle.
The bottom of this triangle (point C on the chart below) formed when the pair reversed up from the former strong resistance and now support at the round price level 0.9400, running close to the 50% Fibonacci retracement of the preceding longer-term upward price impulse (as is shown on the second chart below). The price has recently reversed up (at point D) from the support at 0.9700 standing close to the former ABC correction (lying between the A and C points of this triangle, labelled in blue on the second chart below) resistance trend line, acting as support after having recently been broken by the C to B upward sub-wave of this triangle. The pair is expected to rise further in the direction of the upper resistance trend line of this triangle in the coming sessions.
The following longer-term daily AUD/USD chart displays the technical price levels mentioned above.
Weekly Index Update: E-mini S&P 500 futures
The E-mini S&P 500 futures contract formed a bottom at 1147.50, completing the uptrending support line of a triangle chart pattern on the 1440-minute chart. This action led to a spectacular rally which reached a top at 1262.75. This completed the resistance line of an emerging pattern. Autochartist indicates the contract may straddle the extended resistance line. A case can be built, however, for a possible retracement of the entire rally.
The overall quality of the chart pattern is a below average four bars. The initial trend is rated one-bar. This indicates a weak uptrend prior to the formation of the chart pattern. The uniformity rating measures the strength of the touches or near touches of the support and resistance lines. In addition, it looks for equidistant support and resistance lines. The clarity rating is a below average four bars. A high number of ‘market spikes’ may be the reason behind this relatively low rating.
The 3-point extension Fibonacci pattern is a symmetrical pattern. This means that there is a price and time relationship between the rally from Point A to Point B and the break from Point B to the new support level. This is what allows Autochartist to make an accurate price forecast. The 3-point extension is also comprised of the basic Fibonacci ABCD or ‘lightning bolt’ pattern. When compared to the 3-point retracement Fibonacci pattern, one will notice that it ‘extends’ beyond Point A, whereas the former stops slightly above it.
The triangle chart pattern is a non-trending pattern. The highlight of this chart pattern is the narrowing of the support and resistance lines which often compress the trading ranges, leading to an eventual volatile breakout. Since the top or current turn in the market is occurring at a relatively wide spot, the contract is likely to swing lower. Based on the range of the last rally from 1147.50 to 1262.75, the first downside target is a retracement zone at 1205.25 to 1191.50. Swing traders may want to approach this market from the short side, looking for a near-term break into the 50 % to 61.8 % retracement zone.
Disclaimer: the above comments do not constitute investment advice and IG Index accepts no responsibility for any use that may be made of them.
