- Price adds 5.1% from this week’s low as the Fed scaled back expectations of future rate hikes.
- Silver is short-term overbought and might need to turn neutral before heading higher.
The trend is bullish, but it would be fair to expect silver prices to soften slightly given that price is near the October 15 2015 high of $16.23. Traders sold here in October and may do so again, particularly as price has risen by 5.1% from this week’s low of $15.21.
After a pullback, price may resume its bullish trend as the Fed is not as hawkish on rate hikes any longer and this may suggest that the USD could remain soft.
Also, if the Fed decides to allow inflation to rise without raising rates, then this may increase the demand to hedge against inflation. Silver and gold tend to be popular in these cases.
As long as the FOMC low of $15.21 holds as a support, the trend will be bullish and traders might see a pullback to the $15.57 – $15.81 range as an opportunity to buy. On a break to the FOMC low of $15.21, the technical trend turns bearish and prices may slide to the next in line support level, namely the March 3 low of 14.87.
Today’s highlight will be the University of Michigan sentiment report, which is expected to show a rise to 92.2 from 91.7, according to a Bloomberg news poll. See our economic calendar.
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Silver Prices | FXCM: XAG/USD
Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano
— Written by Alejandro Zambrano, Market Analyst for DailyFX.com
Contact and follow Alejandro on Twitter: @AlexFX00
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