Extended silver rally reaches critical resistance
James Chen, CMT February 16, 2017 3:49 PM
- Similar to its richer cousin, gold, silver has seen a sharp relief rebound for the first month-and-a-half of the year, rising more than 12% since the beginning of 2017. In fact, silver’s performance during this time period has substantially eclipsed that of gold.
- This rally for both silver and gold has coincided in an expected fashion with a pullback for the US dollar along with continued ambiguity regarding the outlook for US interest rates after the last Fed rate hike in December.
- Silver is currently trading in a strong uptrend, but is also entrenched within a longer-term downtrend since the 21.00-area high of July 2016.
- The price of silver has currently bumped up against the major resistance imposed by a confluence of factors, including a descending trend line outlining the noted downtrend from July, the key 18.00-area support/resistance level, and the 200-day moving average.
- As of this writing, silver has broken slightly above the 18.00 resistance level. If the US dollar continues to fall in the short-term, a clean breakout for silver above 18.00 and the abovementioned resistance factors is a distinct possibility, in which case the next major upside target is at the key 19.00 resistance level, which has not been reached since November of last year. In the opposite event that the price of silver respects resistance with a turn back down at or around the 18.00 level, the next major downside target within the still-intact bearish trend is around the 17.00-area support.
More From James Chen, CMT
- Technical breakdown extends bearish pressure on dollar March 21, 2017 2:58 PM
- Market risks sustain GBP/JPY pressure March 20, 2017 1:53 PM
- See More
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. GAIN Capital Group, LLC is a registered Futures Commission Merchant and Retail Foreign Exchange Dealer with the Commodity Futures Trading Commission (CFTC)and is a member of the National Futures Association (NFA # 0339826) in the US, GAIN Capital UK Ltd is authorised and regulated by the Financial Conduct Authority (FCA) in the UK, GAIN Capital Australia Pty. Ltd is regulated by the Australian Securities and Investment Commission (ASIC) in Australia, and GAIN Capital Japan Co. Ltd is authorised and regulated by the Financial Services Agency (FSA) in Japan. Please read Characteristics and Risks of Standardized Options.