Silver Prices Remain Stable Ahead of U.S. Industrial Production
- Silver prices trade sideways in the short-term. The short-term support level is Wednesday’s low of $16.02; it is also the short-term trend defining level of the bullish trend.
- The October high of $16.38 is a critical and long-term resistance level for silver prices.
- The U.S. Industrial Production report and University of Michigan Confidence index are both to be published today and may have an impact on silver prices via the USD.
Silver prices have continued to trade just below the October high of $16.38, a critical and long-term resistance level for silver prices. This level is significant from a technical perspective, as a break here would expose the next major high, namely the May high of $17.80. An interim resistance level beyond the October high is the June 2, 2015, high of $16.88.
A short-term support level is Wednesday’s low of $16.02; it is also the short-term trend defining level of the bullish trend, as it is a higher low than the April 4 low of $15.83.
On a breach to Wednesday’s low of $16.02, the short-term trend may shift to bearish as the sequence of higher lows would end, and with this, the bullish trend would fail.
Support levels beyond Wednesday’s low are the April 4 low of $15.83, followed by the March 31 high of $15.15.
The U.S. Industrial Production report and University of Michigan Confidence index are to be published today and may have an impact on silver prices via the USD.
Industrial Production is one of the trouble spots of the U.S. economy, and the year-on-year growth has been consistently negative since September of last year. This development has been a drag on U.S. GDP growth and cited as a reason for the Fed being hesitant to raise rates. With this in mind, if U.S. Industrial production prints stronger than the -0.1% MoM, projected by a Bloomberg economist survey, it might lend the USD a boost and weaken the silver prices. A softer than expected figure may have the opposite effect.
The University of Michigan Confidence is also on deck, but some economists note that its record as an indicator of household spending tends to be poor. Economist consensus projects a rise in the index from 91 in February to 92.
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
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