News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
Oil - US Crude
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Forex liquidity makes it easy for traders to sell and buy currencies without delay, and also creates tight spreads for favorable quotes. Low costs and large scope to various markets make it the most frequently traded market in the world. Learn more here: https://t.co/arxYmtQeUn https://t.co/rFlQtyQS81
  • Canadian Dollar snapped a three-week losing streak after USD/CAD stalled at key technical resistance. Get your CAD weekly forecast from @MBForex here: https://t.co/BPHuKecwnz https://t.co/73OmuCKfU9
  • Forex quotes reflect the price of different currencies at any point in time. Since a trader’s profit or loss is determined by movements in price, it is essential to develop a sound understanding of how to read currency pairs. Learn how to read quotes here: https://t.co/CNtqrKWDBY https://t.co/KzhQnGiLyt
  • A currency carry trade involves borrowing a low-yielding currency in order to buy a higher yielding currency in an attempt to profit from the interest rate differential. Find out if the carry trade suits your trading style here: https://t.co/7t4BzmLg8w https://t.co/cuneuJNZlH
  • Get your snapshot update of the of top level exchanges and key index performance from around the globe here: https://t.co/d8Re5anlG5 https://t.co/danCiP5vqK
  • Traders utilize varying time frames to speculate in the forex market. The two most common are long- and short-term-time frames which transmits through to trend and trigger charts. Learn more about time-frame analysis here: https://t.co/9S5tXIs3SX https://t.co/JhYoQ7I19K
  • The Nasdaq 100 index is aiming to breach a key resistance level at 14,950 for a second time. A successful attempt may open the door to further gains, although the MACD indicator flags signs of weakness. Get your equities forecast from @margaretyjy here: https://t.co/BEYupi32qB https://t.co/PWeXE8tZVY
  • Currency exchange rates are impacted by several factors. Are different world leaders a contributing factor? Find out here: https://t.co/4jsORznRTE https://t.co/t34kotPE8R
  • Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Learn about FX leverage here: https://t.co/BdgFmkRxVw https://t.co/lM1OIJdjhr
  • Trading Forex is not a shortcut to instant wealth, excessive leverage can magnify losses, and sentiment is a powerful indicator. Learn about these principles in depth here: https://t.co/lZFM8youtX https://t.co/6qGEVjDlN6
Risk Aversion Boosts the Price of Silver, But Not the Long Term Trend

Risk Aversion Boosts the Price of Silver, But Not the Long Term Trend

Research, Research Team

Investors' fear of an equity bubble has translated to a rise in the price of precious metals this week. The question now is, will it continue, and do the technicals support further gains?

As investors become increasingly uncertain about the future of the U.S. equities market, many are reducing their exposure and transferring into haven assets such as gold and silver. This increase in demand has caused the price of silver to rise this week, but will the bullish momentum continue?

Risk_Aversion_Boosts_the_Price_of_Silver_But_Not_the_Long_Term_Trend_body_silverxagusdfourhourchart.png, Risk Aversion Boosts the Price of Silver, But Not the Long Term Trend

First, take a look at the four hour chart. This gives us a "zoomed in" view of the recent rise. Silver prices bottomed out around the 19.00 flat level towards the end of last week. Since then, a sustained rally has driven price up to where it currently resides, just shy of 20.00 flat. As the chart shows, the price has encountered substantial resistance around this level, initially breaking as high as 20.25 before being sold back down to 19.75.

Shorter-term swing traders will look to price action around this level to determine whether a long or a short trade is in order. If the Silver price breaks 20.00, expect a bullish continuation at least as far as 20.25 and likely through to 20.38-20.50. If current resistance holds however, the initial downside target will be the 19.50 level and, beyond that, last week's resistance range at 19.00-19.12.

Risk_Aversion_Boosts_the_Price_of_Silver_But_Not_the_Long_Term_Trend_body_silverxagusddailychart.png, Risk Aversion Boosts the Price of Silver, But Not the Long Term Trend

Now take a look at the daily chart. This chart reveals that silver has traded within a relatively tight range between 19.00 and 20.50 for the past two months. At its current price just shy of 20.00, silver still has some way to go before it reaches the top of its range. A look at the CCI indicator supports this thesis, with a reading of 65.41 indicating there is some way to go before silver becomes overbought at 100.00. The key level to watch will be the 20.50 range resistance, which has not only acted as both support and resistance in the past, but also coincides with the 38.2% Fibonacci retracement of the October highs and November lows. If silver prices can break through this confluence of resistance, expect further gains to at least 21.00 flat (the 50% Fibonacci retracement) and likely beyond to a previously significant support level at 21.14-21.20.

Risk_Aversion_Boosts_the_Price_of_Silver_But_Not_the_Long_Term_Trend_body_silverxagusdweeklychart.png, Risk Aversion Boosts the Price of Silver, But Not the Long Term Trend

Finally, take a look at the weekly chart. The main takeaway from this chart is the long term support/resistance at which price currently resides (around 19.00). The 19.00 flat level acted as strong support in July 2008, and on numerous occasions during 2009 and 2010. Once price broke this level, it did not retest it until June last year. From this retest, price bounced considerably as the level offered strong support. If price breaks 19.00 expect a sharp decline, initially towards previous support at 17.50 and, beyond that, down towards 15.00 flat.

If the 19.00 support holds however, expect a bounce initially to 21.14 and, if bullish momentum is strong enough, up towards the 61.8% retracement from the 2008/2011 low/high between 24.37-25.00.

All said, fundamental factors will likely decide the longer term direction of silver, but keep an eye on the key levels mentioned in this article to help you identify potential entry and exit points.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES