Since its downside capitulation which saw Silver fall to a low of 60.964 on March 23rd, recent price moves have been more constructive with the popular alternative to Gold currently trading 2.7% higher on the day around 72.04 (0700 BST), with traders waiting to see if these gains can be sustained on a closing basis to post 3 up days in a row, something that hasn’t happened since the start of March.
Gold and Silver, which don’t pay interest or dividends, received a boost yesterday when current Federal Reserve Chair Jerome Powell suggested in a speech from Harvard that longer term US inflation expectations appear to be in check and that policymakers may need to respond to the war in Iran but that’s not yet the case (Bloomberg). In the very short term, these comments seemed to help calm investor fears that higher energy prices may force the Fed to start hiking rates later in the year, something which had been weighing on Silver prices.
However, it’s probably still too early to determine whether this sentiment shift to a more positive bias evolves into a deeper upside move. Traders are currently on high alert for fresh headlines on attacks by US/Israel on Iran energy infrastructure, the outcome of US/Iran ceasefire talks and still have some key US economic data releases to digest. These start later today with Consumer Confidence and JOLTs labour market data at 1500 BST, and end on Friday with the crucial Non-farm Payrolls report (1330 BST), which includes the updated unemployment rate. All these events could impact the direction of risk sentiment, the US dollar and ultimately Silver prices into the weekend.
With so much to focus on, keeping updated on the technical outlook and relevant technical levels that may cap, hold or see price moves extend through can be useful.
Technical Update: Support Range Holding, at Least for Now
On balance, March has proved to be a negative month for Silver, with a decline of 36.75% from the 96.379 March high into the 60.964 March 23rd low. However, as the chart below shows, this weakness held on a closing basis at what might have been anticipated to be a longer term support between 63.944/64.017, a combination of the February 6th low and the 61.8% Fibonacci retracement.
While this broader support area, now also including the 60.964 March 23rd low, continues to hold on a closing basis, traders may be monitoring price action for signs of recovery attempts. Although, we could argue that closes above key resistance, or below important support, may be required to define where the next directional themes for Silver may emerge.
Potential Resistance Focus:
While the 60.964/64.017 support range remains intact on a closing basis through upcoming sessions, attempts at price strength may continue to emerge. However, the latest recovery from this zone has stalled at 74.271, a level which is equal to the 38.2% Fibonacci retracement of the March decline. While not a guarantee of further upside, successful closes above 74.271 may be required to encourage additional attempts at price strength.
Closes above 74.271 could prompt traders to look for a more extended upside retracement of the March decline. This may shift their focus toward 78.554, which is the 50% level, and potentially even 82.702, which corresponds to the higher 61.8% retracement.
Potential Support Focus:
The recovery seen over recent sessions highlights the 60.964/64.017 range as a potentially key support area moving forward. However, there is perhaps a closer support focus at 66.669, the March 26th session low. It is possible that closes below 66.669 could lead to fresh pressure on the 60.964/64.017 area, with any sustained closes beneath this zone maybe leading to possibilities of renewed price declines.
As the chart above illustrates, a break below this 60.964/64.017 key support area could see downside momentum increase, with the next support then being offered by 56.456, which is the December 4th low, maybe even 48.619, the low posted on November 21st.
The material provided here has not been prepared accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research, we will not seek to take any advantage before providing it to our clients.
Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.
Gold and Silver, which don’t pay interest or dividends, received a boost yesterday when current Federal Reserve Chair Jerome Powell suggested in a speech from Harvard that longer term US inflation expectations appear to be in check and that policymakers may need to respond to the war in Iran but that’s not yet the case (Bloomberg). In the very short term, these comments seemed to help calm investor fears that higher energy prices may force the Fed to start hiking rates later in the year, something which had been weighing on Silver prices.
However, it’s probably still too early to determine whether this sentiment shift to a more positive bias evolves into a deeper upside move. Traders are currently on high alert for fresh headlines on attacks by US/Israel on Iran energy infrastructure, the outcome of US/Iran ceasefire talks and still have some key US economic data releases to digest. These start later today with Consumer Confidence and JOLTs labour market data at 1500 BST, and end on Friday with the crucial Non-farm Payrolls report (1330 BST), which includes the updated unemployment rate. All these events could impact the direction of risk sentiment, the US dollar and ultimately Silver prices into the weekend.
With so much to focus on, keeping updated on the technical outlook and relevant technical levels that may cap, hold or see price moves extend through can be useful.
Technical Update: Support Range Holding, at Least for Now
On balance, March has proved to be a negative month for Silver, with a decline of 36.75% from the 96.379 March high into the 60.964 March 23rd low. However, as the chart below shows, this weakness held on a closing basis at what might have been anticipated to be a longer term support between 63.944/64.017, a combination of the February 6th low and the 61.8% Fibonacci retracement.
While this broader support area, now also including the 60.964 March 23rd low, continues to hold on a closing basis, traders may be monitoring price action for signs of recovery attempts. Although, we could argue that closes above key resistance, or below important support, may be required to define where the next directional themes for Silver may emerge.
Potential Resistance Focus:
While the 60.964/64.017 support range remains intact on a closing basis through upcoming sessions, attempts at price strength may continue to emerge. However, the latest recovery from this zone has stalled at 74.271, a level which is equal to the 38.2% Fibonacci retracement of the March decline. While not a guarantee of further upside, successful closes above 74.271 may be required to encourage additional attempts at price strength.
Closes above 74.271 could prompt traders to look for a more extended upside retracement of the March decline. This may shift their focus toward 78.554, which is the 50% level, and potentially even 82.702, which corresponds to the higher 61.8% retracement.
Potential Support Focus:
The recovery seen over recent sessions highlights the 60.964/64.017 range as a potentially key support area moving forward. However, there is perhaps a closer support focus at 66.669, the March 26th session low. It is possible that closes below 66.669 could lead to fresh pressure on the 60.964/64.017 area, with any sustained closes beneath this zone maybe leading to possibilities of renewed price declines.
As the chart above illustrates, a break below this 60.964/64.017 key support area could see downside momentum increase, with the next support then being offered by 56.456, which is the December 4th low, maybe even 48.619, the low posted on November 21st.
The material provided here has not been prepared accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research, we will not seek to take any advantage before providing it to our clients.
Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.
Global risk Warning CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading in CFDs. You should consider whether you understand how CFD
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Informacje i publikacje nie stanowią i nie powinny być traktowane jako porady finansowe, inwestycyjne, tradingowe ani jakiekolwiek inne rekomendacje dostarczane lub zatwierdzone przez TradingView. Więcej informacji znajduje się w Warunkach użytkowania.
Global risk Warning CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading in CFDs. You should consider whether you understand how CFD
Wyłączenie odpowiedzialności
Informacje i publikacje nie stanowią i nie powinny być traktowane jako porady finansowe, inwestycyjne, tradingowe ani jakiekolwiek inne rekomendacje dostarczane lub zatwierdzone przez TradingView. Więcej informacji znajduje się w Warunkach użytkowania.