We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Bearish
Wall Street
Mixed
Gold
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bullish
USD/JPY
Bullish
More View more
Real Time News
  • BOC's Poloz: - Policy from fiscal and monetary side set base for economic recovery - Uncertainty around virus remains -BBG
  • 🇰🇷 Business Confidence Actual: 49 Previous: 52 https://www.dailyfx.com/economic-calendar#2020-05-26
  • Forex Update: As of 20:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 1.69% 🇳🇿NZD: 1.60% 🇨🇦CAD: 1.50% 🇪🇺EUR: 0.78% 🇨🇭CHF: 0.65% 🇯🇵JPY: 0.15% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/QHpL43u1ca
  • archive of today's webinar ready to go https://t.co/dCPU3X7BvY
  • Trump says virus vaccines and remedies are going to be here 'very shortly' - BBG
  • Heads Up:🇰🇷 Business Confidence due at 21:00 GMT (15min) Previous: 52 https://www.dailyfx.com/economic-calendar#2020-05-26
  • Heads Up:🇨🇦 BoC Gov Poloz Speech due at 21:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-05-26
  • EUR/USD has rallied the best part of one big figure so far today and nears important resistance around the 1.1000/1.1020 area. Get your $EURUSD technical analysis from @nickcawley1 here: https://t.co/dJ1UzJSqHR https://t.co/1nHWYmdbIH
  • Commodities Update: As of 20:00, these are your best and worst performers based on the London trading schedule: Silver: 0.04% Oil - US Crude: -0.31% Gold: -1.09% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/RD0ZDklJrB
  • $USDJPY Daily Pivot Points: S3: 107.5 S2: 107.6 S1: 107.67 R1: 107.78 R2: 107.82 R3: 107.93 https://www.dailyfx.com/pivot-points?ref=SubNav?utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
Silver Prices Testing Support, Trend Lower Remains Strong

Silver Prices Testing Support, Trend Lower Remains Strong

2016-05-31 09:58:00
Paul Robinson, Strategist
Share:

What’s inside:

  • Market positioning remains unfavorable for higher prices, but historical extreme moderates
  • Continued weakness in silver prices likely to persist
  • Support around 16 barely holding, looking to January trend-line next

On Thursday, we went over our logic as to why we believe the price of silver will continue to drop, or at the least remain well-offered on rallies; it all stems from an unwinding of the extreme positioning in the futures market. On Friday, the latest COT report showed the largest decline in net speculative longs since the multi-year low in silver prices in December. COT data is based on positioning changes for a one-week period ending on the Tuesday prior to the report released each Friday. With that said, with silver experiencing further weakness since last Tuesday a further unwinding should be seen again in this week’s report. Positioning still has room to correct before we will consider it a neutral, and much further to go before it will be considered a notable positive. (For more details regarding positioning see last week’s piece/graph.)

Looking at the chart: The area around 16 has been viewed as an important support level. Continued trade below, which is looking like the case as buyers are currently showing limited interest, will likely carry silver towards the trend-line (~15.75) running off the January swing low. A move below this trend-line to the 14.60/80 vicinity looks quite possible given the before discussed positioning extreme. Bounces within the descending parallel are likely to be short-lived and viewed as opportunities to sell. An ideal spot to look for a short at this time is at the upper parallel of this channel. If looking to play from the long-side for a counter-trend trade, a strong rejection at support needs to occur before increasing the likelihood of seeing a meaningful bounce. But, again, at this time still working from the short-side until we see a material change in technical posturing and market positioning.

Silver Price Daily

Silver Prices Testing Support, Trend Lower Remains Strong

Looking for longer-term forecasts? Check out our analyst views here.

---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter @PaulRobinsonFX, or email him directly at instructor@dailyfx.com

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.