Silver prices are stable as we are near the August low of $13.96, and as the price have been declining for 11 consecutive days without any major bounce. The decline was spurred by a hawkish Federal Reserve and if they go ahead with rate increases over the next few months, then silver prices may break the $13.96 support level and reach the July 13, 2009 low of $12.44 (in the next 6 months). For now I suspect that the price is trying to carve out a low and as prices are oversold. If we indeed get a low then price may reach the mid-point of the $13.96 - $16.20 range (at $15.06).
Silver May Bounce If Prices Remain Above $13.96.
Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano
In today’s session we keep an eye on Wednesday’s high at $14.52. The short-term trend is bearish below this level and we may reach $14.13 (which is an intraday low from August 27). Traders looking to fade a bounce will probably do so in the $14.36 - $14.52 range, as this would generate an acceptable risk-reward ratio.
Traders looking for a move to the midpoint of the $13.96 - $16.20 range, will see a break to Wednesday’s high at $14.52 as the beginning of a move higher.
We note that Gold prices are near to breaking their trend-defining level at $1090, which would make it hard to justify a bearish view on silver.
U.S. Retail Sales and the Uni. of Michigan Consumer Confidence Survey on tap
As the silver spot price is linked to the USD, we would need U.S. Retail Sales to beat economist consensus for the Dollar to gain and silver to slide.
Economist consensus expects that the retail sales headline number will rise by 0.3% MoM and that retail sales minus the auto stats will rise by 0.4% MoM. The retail sales control group is expected to rise by 0.3% MoM. U. of Michigan consumer confidence survey is expected to print 91.5.
Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano
--- Written by Alejandro Zambrano, Market Analyst for DailyFX.com
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