Silver prices are more or less flat since yesterday and our technical outlook therefore remains the same.
The short-term trend is bullish above the February 29 low of $14.60 and this suggests that prices may head higher over the coming days. Silver may trade as high as it did last week, recording a peak of $15.83 and potentially on a break to this high, could increase its position yet further, topping the February high of $15.97.
It should be stated that price is also neutral relative to its trend as it has corrected 50% of the rally from the February 29 low of $14.60. The risk/reward ratio is therefore favoring bullish positions from current levels.
On a break to the February 29 low of $14.60, there is a heightened risk that price may have turned bearish and I would therefore expect bullish traders to be heading for the exit.
Today’s ECB meeting may affect the demand for the U.S. Dollar, which in turn may affect silver, but at this stage it’s hard to know how this may explicitly take form.
In the afternoon, U.S. Jobless claims are on tap and a Bloomberg news poll projects a decline to 275k from 278k. A lower than expected reading may be silver bearish as it suggests that the U.S. labor market is doing better than expected, while a higher than expected outcome may actually have the opposite effect.
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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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