Silver Prices Falling Back from Resistance to Support
- Silver trades through one level of resistance, but reverses at another after FOMC
- Reversal day leading to decline, needs to hold above 18 to keep longs out of trouble
- US jobs report up tomorrow
On Tuesday, precious metals, and silver more specifically out of the multi-week triangle formation, were ripping towards resistance. From our last post,“If silver can press on through and close above the Jan trend-line, the next area of good resistance comes in at the 8/29 low of 18.40. Beyond there we will need to turn to the 9/16 low at 18.67.” Check and check on those resistance levels coming into play. Gold ran aground at big resistance in the 1300/10 region.
Yesterday’s FOMC meeting helped put a lid on the advance, with silver backing off from just above the 9/16 low and closing just north of the 8/29 low. This price action resulted in a bearish rejection bar, which we are seeing follow-through on so far today. There is support by way of the recaptured January trend-line down to around 18 (currently testing). For the current move to hold, sinking below this trend-line and 18 would likely not bode well for longs.
A short period of congestion, possibly already underway, could help give silver the base needed to continue the push higher. With nothing visible to the left above the September low, the next level of significant resistance above yesterday’s high comes in at the trend-line off the July spike high. This would be a formidable line of resistance to overcome given how well it has kept the price of silver pointed lower for several months.
Created with Tradingview
Tomorrow is ‘NFP Friday’, and while no predictions regarding the outcome will be made on this end, should we see a sizable deviation from expectations, you can pretty much bank on heighted volatility. Join me tomorrow at 9:00 GMT as I go through the NFP game-plan for FX, commodities, and indices.
---Written by Paul Robinson, Market Analyst
To receive Paul’s analysis directly via email, please sign up here.
You can follow Paul on Twitter at @PaulRobinonFX.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.