Forex Commentary: Silver Expoding Higher as Fakey Pattern Completes – 4th November 2010

Forex Commentary

The U.S. dollar fell further today. Weighing heavily on the dollar was higher energy and commodity prices. Spot gold touched record highs again today as the Fed’s move to increase the money supply in the U.S. weighed the greenback down.
The weaker dollar is viewed as inflationary for the U.S. economy, however, it should help boost the weak U.S. export sector. Technically the US dollar remains extremely weak and the trend remains bearish.

Trading Setups / Chart in Focus

Silver

We discussed the bullish Silver fakey setup in the Members Market commentary yesterday, noting the huge fakey / pin bar buy setup that had formed on the daily chart. This was a “huge” long tail bullish pin bar fakey, which is not your conventional type of price action signal. This signal needed bullish confirmation above the highs to confirm, and that did indeed occur overnight, catipulting prices to record highs, producing a close above the $25.00 resistance level. Signals like this are obvioulsy unique and rarely occur, but the principles remain the same. The annotated chart below shows the inside bar structure which then saw prices form a false break down, and then a subsequent bullish reversal back above the highs, completing the fakey pattern.

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Other Markets

In New York, the stock market extended it’s impressive rally to close at two-year highs, a day after the Federal Reserve unveiled a plan to boost the economy.

The Dow Jones added 219.71 points today, or 1.96 percent, the S&P 500 gained 23.09 points, or 1.93 percent, and the Nasdaq added 37.07 points, or 1.46 percent.

Upcoming important economic announcements: 11/5

Tentative: Japan – BOJ Press Conference
5:30am EST: Britain – PPI Input m/m
7:00am EST: Canada – Employment Change
7:00am EST: Canada – Unemployment Rate
8:30amEST: Canada – Building Permits m/m
8:30am EST: United States – Non-Farm Employment Change
8:30am EST: United States – Unemployment Rate
10:00am EST: United States – Pending Home Sales m/m
2:00pm EST: United States – Fed Chairman Bernanke Speaks