Silver Prices Breach Lower End of Trading Range
- Silver Prices turned bearish as they breached the lower end of the $17.15 to $17.62 range.
- The primary driver behind the current slide to silver prices is a stronger Dollar.
- The next set of economic data is the U.S. Wholesale Inventories Report. A Bloomberg News poll projects a rise of 0.1% MoM from -0.5% in February.
Yesterday, price breached the lower end of the $17.15 to $17.62 range, a range that we highlighted on April 9.
The break to the May 4 low of $17.15 has now left the short-term trend bearish below the April 6 high of $17.56. The trend is short-term bearish below the May 6 high, as it is a lower high in relation to both the May 5 high of $17.62 and the May 2 high of $18.
The nearest support level is the Asian session low of $16.88, followed by the April 25 low of $16.78.
We note that below the April 25 low of $16.78 the next major low is the April 14 low of $15.88, a level that is 5.3% lower than the $16.78 level. Therefore, the next few days could be very interesting for silver, given that it is trading so close to a critical support level.
The primary driver behind the current slide to silver prices is a stronger Dollar, which has gained against its G10 peers in today’s session. The next set of economic data is the U.S. Wholesale Inventories Report. A Bloomberg News poll projects a rise of 0.1% MoM from -0.5% in February. We note that persistent negative growth tends to surface when the U.S. economy is struggling.
Earlier today, the U.S. NFIB Small Business Optimism index rose to 93.6 vs. the 93 expected and 92.6 level prior. The gain to the index has broken a declining trend, which had been in place since December 2015. A rising NFIB Small Business Optimism index implies that small business is turning more optimistic, which allowed the Dollar to gain slightly vs. silver at the time of publication this morning.
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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