FUNDAMENTAL
OVERVIEW
Same as we saw for gold, yesterday
we got a quick selloff in silver without any clear catalyst, although half of
the losses were eventually pared back. The curious thing is that we saw the
same price action across many other assets around the same time. It’s unclear
what triggered those moves.
Today, the focus is on the
US CPI report as it’s going to be a big risk event for precious metals. The
market is pricing 58 bps of easing for the Fed this year, so there’s a high
risk of a hawkish repricing in case the data comes out strong. In such a
scenario, we will likely see silver selling off again and potentially reaching
new lows.
On the other hand, a soft
report shouldn’t change much in terms of near-term Fed policy, but it will keep
the dovish bets in place which should act as support for silver.
SILVER TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that silver continues to consolidate between the trendline and the major
swing high around the 92.00 handle. What level is going to be tested first will
likely be decided by today’s US CPI report. There’s not much we can glean from
this timeframe, so we need to zoom in to see some more details.
SILVER TECHNICAL ANALYSIS – 4
HOUR TIMEFRAME
On the 4 hour chart, we can
see there’s not much we can see on this timeframe either, but the fact that we
are making lower highs could be a dangerous signal for the bulls as a test of
the trendline might have higher probabilities.
SILVER TECHNICAL ANALYSIS – 1
HOUR TIMEFRAME
On the 1 hour chart, we
have a downward trendline defining the bearish momentum on this timeframe. If
the price pulls back to the trendline, we can expect the sellers to lean on it
with a defined risk above it to position for drop into the major trendline. The
buyers, on the other hand, will look for a break higher to pile in for a rally
into the major swing level around the 92.00 handle. Watch out for the US CPI
report today as it could trigger big moves in the market. The red lines define the
average daily range for today.
UPCOMING CATALYSTS
Today we conclude the week with the US CPI report.
This article was written by Giuseppe Dellamotta at investinglive.com.
