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Talking Points

  • Trend remains bearish below $14.40 despite, USD pulling back and risk-aversion increasing on the back of the downing of a Russian warplane by Turkey
  • Today’s data batch was mixed and there is no strong compelling reason to expect silver price to break their down trend

The price of silver is higher by 0.70 percent in today’s session as the USD gives back some of its gains and as risk-aversion picks up as the markets digest the news of a Russian Jet being shot down by Turkey.

Technical Outlook

The technical trend remains bearish below the November 20 high of $14.40, and as long as this level caps the price of silver. I am expecting a decline to $13.80 and $13.50.

In the case $14.40 fails to keep the trend bearish, it would be fair to expect a short-squeeze taking price to $14.80 (38.2 percent of the decline from $16.33) and then $15.12 (50 percent correction). This may take several days to complete as the long-term fundamentals still favours the downside. Main driver is a stronger dollar and expectations of a rate increase in December.

Data Overview – No strong reason To Buy Silver

German IFO index increased by 109 vs. a Bloomberg estimate at 108.2.U.S. GDP met consensus expectations and increased by 2.1 percent QoQ (annualized), and U.S. house prices rose by 5.45 percent YoY vs. a Bloomberg estimate of 5.10 percent.

On the soft side; U.S. Consumer confidence printed 90.4 vs. 99.5 expected, whilst Richmond Fed Mfg. Index printed -3 vs. estimated -1.

U.S. yields (at the point of this writing this article) were not suffering any major losses on the back of the data prints and would therefore suggest that there is no strong reason for silver prices to rise.

Silver Prices: Traders Still Aiming For New Lows

Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano

--- Written by Alejandro Zambrano, Market Analyst for DailyFX.com

Contact and follow Alejandro on Twitter: @AlexFX00

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