Given the recent volatility in price globally, higher rates of volatility are set to come into the markets and trading should sustain a cautious outlook. On Wednesday the rough count for the numbers in the USA for coronavirus cases should start presenting exponentially and this will indicate on the market response a stronger directional bias, right now it is not unusual for the dollar index to have retraced to where it did and therefore the foreign currencies to display the downside in prices that came in on Friday of last week.
The original level in silver still proceeds and although there has been an aggressive drive to discount levels these could offer a better entry into a long idea should we get aggressive numbers of coronavirus in the USA, as certain distributors of gold and silver have started running out of inventory and although this is not obvious right now in price it has a lagging effect and the overhaul in demand could start showing itself if we get above 17.60
Fig. 1 shows a 12 hr chart outlook we must now watch if the price is willing to go above 15.30 and not reject for the next upside to be this one if it trades above 15.30 then we can starting hunting a long entry on a long term basis but with the idea to also take some profit should we get to 17.60
The currencies GBP/USD saw a strong decline and breakaway from its support level, right now where the price is sitting we have to scenarios and they are based on the reaction of the dollar the levels worth noting are the following:
1.2630 and 1.2180, should we get above 1.2630 and not reject strongly then we could start seeking longs toward 1.32 if we get above 1.2630 and reject then shorts can be established to target 1.2180
If we, for example, get above 1.2630 and begin to reject then there are 440 pips offered on the downside and if we do not reject there are 570 pips on the upside so we are relatively in the middle of a decisive move, but the measures the UK have taken seem almost as though they want their population exposed to this virus and this could push price lower if the dollar index is not met with heavy downside
Looking at the stocks front, stocks saw a continued decline and the US Open today may show further gaps down in price, while this is favorable in shorts we will now need to see how stocks open today to provide a further outlook as to where we could price in for the week ahead before Wednesday but establish the point again that not all stocks are good to short looking again at Netflix and Boeing we see that Netflix closed up higher on the day of Friday while Boeing struggled to make back any gains in its share price
Tomorrow we will have a better idea on where the price is looking to go in fx and commodities and we will see the extent to the further downside available in stocks for shorting opportunities.