Silver prices maintain their sideways trading pattern as traders digest the decline from its October high of $16.33 to $13.59. And while the trend is flat since the end of November the lack of a bearish move does not suggest that it’s time to go long.
For traders to go long it would be fair to expect them to do so on a good fundamental case. Two potential drivers may be risk-aversion picking up (watch Monday’s ISM report) or a changed outlook for the dollar. Something that is not my base case and with this in mind I stick to my bearish view.
From a technical point of view the trend is bearish below the December high of $14.62. Last week we suggested that traders would short near this levels and taking prices lower. This has now happened and I suspect that price will trade lower in the weeks ahead. The first target for bearish traders will be the December low of $13.59, with $13.17 in the case of an extension.
If silver prices manage to take out the December high of $14.62, prices may reach $15 and $15.50, but I would see this an as technical rebound and not the beginning of a new major reversal.
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Silver Price
Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano
--- Written by Alejandro Zambrano, Market Analyst for DailyFX.com
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