Silver prices are now lower for 9 consecutive days and while the overall trend remains bearish and I think the dollar will gain further in the weeks ahead, the downside is getting somewhat more limited for silver spot prices. See a daily chart.
In the very short-term, price is trapped in the $14.42 and $14.58 range. A break to the lower limit will most likely trigger a decline towards the September 15 low of $14.7, while a break to the upper of $14.57 may open for a rally towards $14.70. For a better gauge on which way to lean, keep an eye on the EURUSD as a break to the 1.0720 low should encourage silver to break its $14.42 support level.
U.S. Wholesale Inventories Are Probably Going To Be Ignored
U.S. Wholesale inventories are on tap this afternoon and are expected to print 0.1% MoM. Wholesale sales are also on tap and expected to increase by 0.1% MoM according to a Bloomberg News poll. The ratio of these two variables gives us an idea as to the health of the U.S. economy. It is currently suggested that we are still looking for a low in the U.S. economic cycle. However, the market does not pay too much attention to this indicator and neither does the Fed, which instead places its trust in other indicators such as the U.S. NFP data.
Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano
--- Written by Alejandro Zambrano, Market Analyst for DailyFX.com
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