What’s inside:
- Silver prices finally put in a meaningful move
- Took it down to a key support level
- Short-term trend negative, but at support; still want to see a further decline to test the uptrend off Dec lows
Yesterday, silver prices finally made its first meaningful move in nearly two weeks. It has been a lot of choppy trading in there, with various short-term chart configurations taking shape but never coming to bear any fruit.
Silver had been channeling itself lower since the 7/10 peak, giving the bears a slight upper hand with lower lows and lower highs on the intra-day time-frames, but never really gaining any momentum until yesterday. The sharp decline and overnight weakness led to the NFP-Friday day low. Almost to the penny, buyers were found at this level. The NFP low was 19.208, today’s low – 19.198.
So far, the response is relatively muted, with a modest little bounce developing back towards the underside of the channel and broken support at 19.45. In the near-term, silver is caught between support and slope resistance and a generally negative trend.
Looking at silver from a further view, if the uptrend off the December lows is going to continue, it would be ideal to see silver sink down into the ~18.20/19 range and develop a meaningful low before moving higher. This has been an area of key support which began developing as far back as June 2013. This would also help alleviate the record net long positioning by large speculators in the futures market. It is preferred that the boat is not so loaded long if we decide to get in; the risk of capsizing still looks too high at this point.
Start improving your trading today and check out our free guide, “Traits of Successful Traders”. Also in our trading guides section, you can see where our team of analysts see market heading as we navigate through the 3rd quarter.
---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX.
He can be reached by email at probinson@fxcm.com.
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