The Silver Price Rally Takes A Breather
- Silver prices have traded lower following lower demand for haven assets.
- U.S. Retail Sales are on deck today and may impact silver via the USD.
- The current yearly high of $16.29 is capping price. Beyond the $16.29 high, the October 28 high of $16.38 is the next level of resistance. A short-term support level is yesterday’s low of $15.81.
Silver prices have pulled back slightly from their current yearly high of $16.24 as the demand for safe haven assets are lower following strong global stock markets and a strong USD.
The higher stock markets are motived by the return of growth for Chinese exports, which investors see as being both a sign of encouragement and stabilization for the Chinese economy. The USD is, at the time of writing, today’s winner with the strongest gains being witnessed vs. funding currencies such as the Swiss Franc, Euro, and the Japanese Yen.
Going forward the monthly U.S. Retail Sales report is on deck and may influence the price of silver via the USD. Consumer activity is what has been driving the U.S. economy forward while Industrial Production has been contracting. Hence, the Fed is keen on seeing further gains if it is to continue to raise rates. Later in the day the Fed releases its Beige Book, which provides further clues as to the state of the U.S. economy.
From a technical point of view, silver’s current yearly high of $16.29 is capping price. Beyond the $16.29 high the October 28 high of $16.38 is the next level of resistance, following the June 2, 2015 high of $16.88.
Traders who are looking for a strong support level will notice that silver prices are trading far away from the last major low, namely the April 1 low of $14.81. A short-term support level is yesterday’s low of $15.81.
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Silver Price | 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
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.