FUNDAMENTAL
OVERVIEW
Silver extended the
pullback into the major downward trendline following the US NFP report. The
data wasn’t bad, but it was enough to trigger a slightly dovish repricing in
interest rate expectations. The chances for a July hike are now standing at
just 24%, while the probabilities for a move in September dropped to 55%.
As mentioned previously, given
the Fed’s focus on inflation, the US CPI will likely be more important. For
now, silver will likely remain rangebound at a higher level until we get to the
main event.
This week, we don’t have much on the agenda. We have Fed’s Waller speaking
today, but unless he explicitly endorses rate hikes, the price action should
remain rangebound. The other potential catalyst could be the FOMC meeting
minutes on Wednesday.
This is almost never a market moving report but given the limited forward
guidance from Fed Chair Warsh, traders will want to see if there’s any further
signal in the minutes on the next policy move.
SILVER TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that silver pulled all the way back to the major downward trendline. This
is where we can expect the sellers to step in with a defined risk above the
trendline to position for a drop into new lows. The buyers, on the other hand,
will want to see the price breaking higher to increase the bullish bets into
the 71.55 level next.
SILVER TECHNICAL ANALYSIS –
4 HOUR TIMEFRAME
On the 4 hour chart, we can
see more clearly the pullback into the trendline and the almost perfect
rejection as the sellers started to pile in. There’s not much we can glean from
this timeframe, so we need to zoom in to see some more details.
SILVER TECHNICAL ANALYSIS –
1 HOUR TIMEFRAME
On the 1 hour chart, we can
see the first move lower from the trendline created a lower low. If the price
breaks through the lower low, we can expect the sellers to increase the bearish
bets into new lows with a defined risk above the trendline. The buyers, on the
other hand, will have to wait for a break above the trendline to gain more conviction
for higher highs. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Today, we get the US ISM
Services PMI. On Wednesday, we have the FOMC meeting minutes. On Thursday, we
get the latest US Jobless Claims figures.
This article was written by Giuseppe Dellamotta at investinglive.com.
