Silver Prices: Lower by 9.11% Since May High
- The trend remains bearish below the May 23 high of $16.43.
- A near term resistance level is this morning’s high of $16.29, while the current support levels are yesterday’s low of $16.14, followed by the April 18 low of $16.09.
- A Bloomberg News survey projects that the Markit U.S. Services PMI will rise to 53 from 52.8. If it does indeed gain, then it would be the third month of doing so for the index.
Silver prices drifted lower yesterday evening and reached a low of $16.14, in line with the short-term bearish trend, which has been in place over the last few days. The trend is now bearish below the May 23 high of $16.43, and the trend is bearish below this high given that it is a lower high in relation to the previous high of $16.63 formed on May 20. In a downtrend similar to the current, the norm is for price to drift lower, creating lower highs and lower lows, according to classical technical analysis.
A near term resistance level is this morning’s high of $16.29, while the current support levels are yesterday’s low of $16.14, followed by the April 18 low of $16.09.
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Silver Price | CFD: XAG/USD
Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano
The Markit U.S. Services PMI may rise to 53 from 52.8 according to a Bloomberg News survey. If the outcome were indeed as expected, then it would be a third month of gains for the index. On February 2016, the index reached a cyclical low of 49.7, but relative to the high of 61 in mid-2014, the index is at the lower end of the last few years range.
A better than expected outcome could be important for silver prices and the dollar going forward. This is due to the U.S. economy being dependent on a strong service sector following a faltering manufacturing sector and that such a turning soft may trigger a delay to the Federal Reserve’s plan to raise rates. It is this speculation of the Fed raising rates on June 15 coupled with the stronger dollar, which have been the primary drivers behind softer silver prices.
--- 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.