Silver Prices: The Grind Continues Ahead of FOMC
- Momentum in silver has slowed, but upward bias still intact
- Resistance between 17.35 and 17.55 is capping off a further advance at this time
- Taking a wait-and-see approach into FOMC
In days’ recent, silver prices have seen momentum slow with a bullish tilt to it, as we anticipated following the moonshot move from sub-16. As it turned out, the upward parallel created earlier in the rally held twice this week as support, and currently testing it at the time of this writing.
We will continue to watch how silver trades around this line given the market is proving it as a point of interest. It’s not as if a majority of market participants have the same lines penciled in, but the market is ‘naturally’ gravitating towards it, so we shall too.
The cap on momentum has been the 17.35 to 17.55/60 area where inflection points were created during the first half of May. Rising support coupled with resistance is forcing silver into a small rising wedge-like pattern as we head towards a potentially major market moving event – the FOMC rate decision/policy statement/’dot-plot’. There are zero expectations of rates moving from 0.5%, so the focus will be on the language in the statement and any changes to the Fed members’ anticipated trajectory for interest rates.
What the outcome of the Fed meeting will be, and how markets will react to it and to what extent they will move will be left for someone else to predict. We will take a wait-and-see approach and choose to make assessments once the dust has settled.
For now, we will focus on the previously mentioned technical developments and detail a plan of action after we see how things unfold. The day(s) following Fed meetings tend to be fruitful. There is also the BoJ and BoE tomorrow, so more central bank volatility quickly to follow.
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX, and/or email him directly at firstname.lastname@example.org
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.