- After repeatedly trying to break lower over the last few weeks, the price sliced through prior highs with no resistance from bearish traders. And for the first time since late October my outlook for Silver is bullish.
- I am expecting up to two weeks of correction before silver prices turn bearish once again.
The Big Picture
Silver prices have rallied enough to make it plausible that we will have a medium-term low in place. With this in mind, I expect silver prices to rally higher and maybe reach $15.09, which corresponds to 50 percent of its October to December slide. The rally occurs on a general wave of Dollar profit taking, triggered by the ECB under-delivering monetary stimulus and on markets not expecting more than 2 Fed rate hikes in the next 12 months.
I disagree with the dovish outlook for the Fed and expect more than two rate hikes in the next 12 months (but for now the market is not giving us the go-ahead to trade this view). Instead silver prices are correcting some of its losses. In the $14.79 to $15.50 range I expect the trend to turn bearish. This rally may last from a few days to two weeks.
Get ahead in 2016 – Read The Traits of Successful Traders Guide
Price reached $14.58 which was the target on a break to $14.40. Price now is short-term overbought and a pullback to the $14.25-$14.35 range is probably needed before traders are encouraged to buy given the risk-reward ratio in this range.
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
Learn more about trading and join a London Seminar
To be added to Alejandro’s e-mail distribution list, please fill out this form