Silver Price Rally Stalls After 18.76% Rise From Monthly Low
- Following yesterday’s rise to $17.72 silver prices had risen by 18.76% from their monthly low.
- The technical outlook for silver prices remained bullish to neutral this morning despite prices briefly, and under the commotion of yesterday’s ECB meeting, having traded below the April 20 support level of $16.85.
- Today, focus will revert to the U.S. as the Markit Manufacturing PMI is on deck. A Bloomberg survey projects a rise to 52 from 51.5.
Yesterday, silver leaped higher and reached $17.72, a level not seen since May 2015. Silver subsequently traded lower as the U.S. Dollar gained following the ECB rate decision. The Central bank said it will keep rates low and is not in a rush to alter its monetary policy.
Today, focus will revert to the U.S. as the Markit Manufacturing PMI is on deck. A Bloomberg survey projects a rise to 52 from 51.5, such a rise potentially lifting the index further away from the December low of 51.1 and the February low of 51.3. To end the downtrend, the PMI would need to breach its January high of 52.4, a scenario that the Fed would probably welcome given their highlighting of the sector as a trouble spot.
A reading above 50 implies that the Manufacturing sector is expanding, while a reading below 50 implies a contraction. The report may affect silver prices via the USD.
The technical outlook for silver remained bullish to neutral this morning despite prices briefly, and under the commotion of yesterday’s ECB meeting, having traded below the April 20 support level of $16.85. Usually, a breach to the trend defining level would end the trend, however in this case, prices swiftly bounced higher and stabilized above the low.
Yesterday’s low of $16.76 is the current swing low, which is a higher low in relation to the April 18 low of $16.14, leaving the trend slightly bullish. A potential resistance level may be the psychological resistance level of $17.50, followed by yesterday’s high of $17.72
We do note however, that following the rise to the $17.72 level, silver prices have risen by 18.76% from their monthly low.
Silver Price | CFD: 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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