Mondays Trades

Silver – sell at market 

Stop loss: 15.95 

Take profit: 14.25

Justification: the dollar seems to be recovering ground following turbulences related to last week’s devaluations in China. These devaluations also benefited precious metals as investors thought they could delay interest rate increases in the US. However, now that this concepts seems to be losing ground investors may realize that in fact weaker CNY is negative for demand for gold or silver. FOMC minutes this week may further encourage USD accumulation. Silver prices rebounded off the lows but a rally stopped at 15.60, a local low from late April. Prices have retraced from this area which may confirm that a downward trend will be resumed.      


EURGBP – sell at market

Stop loss: 0.7190 

Take profit: 0.6915

Justification: we recommended selling the pair last week (here) when the price was higher but the trade still looks good even at this price. The pair has reversed course with a formation of the evening star on a daily interval and should move towards a lower limit in a downward channel. The channel is perhaps not very steep but it looks to be persistent as we may see a sequence of lower highs and lower lows.