Silver Prices: Nothing to the Left Until 16
- Silver dives after failing near July trend-line
- Broke through support at ~17.11, nothing substantial until around 16
- Strong trend and overhead levels keep path of least resistance lower
We started Thursday’s post with this, “One of the less dramatic moves following the surprising US presidential victory by Donald Trump was in silver…” It took another couple of days for a violent move to set in, with Friday’s 6.5% drop wrecking all that was accomplished through October into the first half of November. The decline began from just under the important July trend-line, which has kept the trend lower in recent months. The US dollar continues to rock-and-roll, making life tough for those long of precious metals. Keep an eye on the US Dollar Index (DXY) as it trades around 100, a level it has peaked at on two occasions – March and December 2015.
The Friday/Monday decline put silver below the October low and support level running back to June (~17.11). As long as it stays beneath this area of support turned resistance, the path for lower prices is fairly clear. Looking to the left, there is no substantial support until silver reaches down to around the 15.80/16 level, where we have a clear inflection zone going back better than a year.
If silver were to get a bump back above the October low, the trend and congestion from the October triangle should keep a lid on the metal on any minor advance above. At this time, the 17.30/90 region looks to be about as far as a bounce could carry before finding sellers again.
For now, we will focus on the short-side of the tape until further evidence suggests the current downdraft is over. Join me for tomorrow's webinar at 10 GMT where I will discuss silver and other markets in detail.
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---Written by Paul Robinson, Market Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.