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Silver Price: Traders Test Both Sides of the $16.88-$17.56 Range

Silver Price: Traders Test Both Sides of the $16.88-$17.56 Range

Alejandro Zambrano, Market Analyst

Talking Points

  • Silver volatility is high within the $16.88-$17.56 range as it tests both sides of the range.
  • The demand for USD may affect the price of silver; U.S. Retail Sales may gain by 0.8% MoM from -0.3% in March as per a Bloomberg News poll.

Despite silver prices being trapped within the $16.88-$17.56 range and volatility usually contracting when prices are trapped; the price swings have been brutal.

Merely two days ago, price attempted to breach the May 6 high of $17.56, however, overnight during the Asian session, bearish traders attempted a run on the lower end of the $16.88-$17.56 range. There is no apparent driver to the latest decline.

For now, the trend is neutral as neither bullish nor bearish traders have firm control over prices. Resistance levels above the $17.56 high are the May 5 high of $17.61, followed by the May 3 high of $17.70. The next support level below the $16.86 low is the March 25 low of $16.78, followed by the psychological level of $16.50.

U.S. Retail Sales may gain by 0.8% MoM from -0.3% in March as per a Bloomberg News poll. The report is important for the Fed and potential rate hikes, as the U.S. manufacturing sector is soft and the general growth of the U.S. economy is driven by consumption. The U.S. Retail Sales report gives us a hint of how Personal Consumption may have developed.

With the Fed hoping to raise rates later this year, a solid gain to U.S. Retail Sales may be needed in order for GDP growth to meet the Fed’s expectations. With this in mind, a stronger than expected U.S. Retail Sales figure may boost the USD and soften silver, while a lower than expected outcome may have the opposite effect. The U.S. PPI report is also on deck as well as U.S. Michigan Consumer Sentiment. For more on the same topic, read today’s update by Ilya Spivak, Currency Strategist at DailyFX.

Our forecasts for Q2 2016 are live on the site. Download them for free.

Silver Price | CFD: XAG/USD

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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.

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