FUNDAMENTAL
OVERVIEW
Silver has been outperforming
gold recently amid tailwinds like lower real yields, looser financial
conditions and lower US dollar. The momentum and volatility have certainly not
been the same since the late January’s crash. The key difference has been the Fed
which has pivoted away from the dovish stance.
Nonetheless, silver should
remain supported amid the positive US-Iran deal expectations which should keep
any downside limited.
Everything now hinges on
US-Iran talks. If negotiations were to collapse again, we might get a bigger pullback,
but as long as the ceasefire holds, the losses should remain limited. On the
other hand, a peace deal might give silver another boost to extend the rally
into new highs. For a much stronger rally though, silver would need the Fed to
pivot back to a dovish stance.
SILVER TECHNICAL
ANALYSIS – DAILY TIMEFRAME
Silver – daily
On the daily chart, we can
see that silver is continuing to slowly edge higher amid the positive US-Iran
expectations. The natural target for the buyers is the major swing level at
96.35. If the price gets there, we can expect the sellers to step in with a
defined risk above the swing level to position for a drop back into the 70.00
handle. The buyers, on the other hand, will look for a break to increase the
bullish bets into the 120.00 level next.
SILVER TECHNICAL ANALYSIS –
4 HOUR TIMEFRAME
Silver – 4 hour
On the 4 hour chart, we can
see that the price broke above the key 77.98 resistance opening the door for
more upside. We have an upward trendline defining the bullish momentum. If we
get a pullback into the trendline, we can expect the buyers to lean on it with
a defined risk below it to keep pushing into new highs. The sellers, on the
other hand, will look for a break to pile in for a drop into the major
trendline around the 67.50 level.
SILVER TECHNICAL ANALYSIS –
1 HOUR TIMEFRAME
Silver – 1 hour
On the 1 hour chart, the
recent consolidation above the 77.98 level might have formed a bullish flag. We
can expect the buyers to step in around the lower bound of the pattern to keep
pushing into new highs and increase the bullish bets on a break above the upper
bound of the flag.
The sellers, on the other hand, will look for a break below
the lower bound of the flag to extend the pullback into the upward trendline targeting
a break below it. The red lines define the average daily range for today.