Silver Prices Testing Key Support Hurdle
- Silver prices eye key near-term support at 17.50
- Updated targets & invalidation levels
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Technical Outlook: Earlier in the month we highlighted the threat of a near-term turnover in silver prices with key support noted at 17.50. Since then, prices are down nearly 3% with today’s low (so far) Registering at 17.53. Note that the decline will have marked its 7th consecutive daily decline if we were to close at these levels, and while that’s not a reason to get bullish, prices are coming into an area of support and may limit the downside near-term.
Notes: A closer look at price action further highlights this near-term support confluence at 17.52- this level now also converges on the 61.8% retracement of the March advance. Near-term bearish invalidation now lowered to 17.95 with a breach above 18.33/39 still needed to put a long-bias back in control.
A break below this mark targets 17.33 – a level defined by the 1/18 swing high & the 100-day moving average- with subsequent support objectives eyed 17.03& 16.82. From a trading standpoint, I’m looking for near-term support here basically, with a rebound to offer more favorable short entries targeting a new low.
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- A summary of IG Client Sentiment shows traders are net-long Silver- the ratio stands at +6.35 (86.4% of traders are long)- bearish reading
- Long positions are 5.9% higher than yesterday and 8.3% higher from last week
- Short positions are 10.9% lower than yesterday and 24.3% lower from last week
- The continued build in long positioning points lower for silver but the recent washout of the short-side also suggests that the immediate decline may be vulnerable here- especially as prices come into near-term support. It’s also worth noting that the most recent Commitment of Traders report continued to show a record long position and keeps the broader risk weighted to the downside from a sentiment standpoint.
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Other Setups in Play:
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- NZD/USD Rebound Vulnerable Ahead of New Zealand CPI
- EUR/NZD Into Resistance- Pullback to Offer Entries
- Written by Michael Boutros, Currency Strategist with DailyFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.