Silver trading has been sluggish since the start of the week and price remains trapped between the February 10 low of $15.11 and the February 16 high at $15.46.
Sluggish trading is not uncommon for silver and shouldn't be seen as bad. Because when a breakout occurs the move tends to be explosive.
The Levels To Watch
A break to the upper end of this range (the $15.46 high), may open the door for a rally to the February 12 high of $15.79, while break to this level opens for a rally to the current yearly high at $15.97.
Soft stock markets and a weak U.S. Dollar supports a boost to silver prices. While a major reversal in these markets would suggest lower silver prices.
On a breach to the lower limit at $15.11 the price may drop to the February 5 low of $14.62. Also as mentioned in yesterday's outlook, silver maybe in the process of carving out a major ‘Head and Shoulders’ pattern with the price reaching $14.25. For more and this please read yesterday's outlook.
Macro Data On Deck
Today at 13:30 GMT, a Bloomberg poll projects U.S. Jobless Claims to rise from 269k in the prior week to 275k. A lower than expected outcome implies less people are applying for unemployment benefits, which to some extent suggests that the U.S. labor market is doing better than expected. This may boost the Dollar and soften silver. While a higher than expected outcome may have the opposite effect on silver. The Philadelphia Fed index is also on tap and projected to print -3 from -3.5.
Silver Prices | FXCM: XAG/USD
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
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