FUNDAMENTAL
OVERVIEW
Silver has been in
consolidation mode ever since the big crash as the lack of key catalysts kept
traders on edge. Much like for gold, the fundamentals are still against rising
prices due to improving US data and easing geopolitical tensions. Silver has a
high correlation with gold but it’s more volatile being a much smaller market.
This Wednesday could be
pivotal for silver as we will get the US NFP report. In fact, the market is
pricing 54 bps of easing for the Fed this year, so there’s a high risk of a
hawkish repricing in case the data comes out strong. In such a scenario, we
will likely see another selloff in silver.
On the other hand, a weak
report should strengthen the case for more Fed easing and might even see
traders bringing forward rate cut bets as some Fed members expressed scepticism
about labour market stabilisation. In that case, silver will likely find a
tailwind to rally into new highs.
SILVER TECHNICAL
ANALYSIS – DAILY TIMEFRAME
Silver – daily
On the daily chart, we can
see that silver, contrary to gold, made a new low last week but eventually
rebounded. The price action remains mostly rangebound as traders await the US
NFP and CPI reports. From a risk management perspective, the sellers will have
a much better risk to reward setup around the 92.00 handle to position for a
drop into the major trendline around the 58.00 level. The buyers, on the other
hand, will need the price to break above the 92.00 handle to open the door for
a rally into new all-time highs.
SILVER TECHNICAL ANALYSIS – 4
HOUR TIMEFRAME
Silver – 4 hour
On the 4 hour chart, we can
see more clearly the resistance around the 92.00 level where we can also find
the broken trendline for confluence. Again, that’s where the sellers would have
a better risk to reward setup to target new lows, while the buyers would look
for a break higher to increase the bullish bets into new highs.
SILVER TECHNICAL ANALYSIS – 1
HOUR TIMEFRAME
Silver – 1 hour
On the 1 hour chart, we can
see that we have a support zone around the 73.00 level where the price got
rejected from several times. If we get a pullback into that support, we can
expect the buyers to step in with a defined risk below it to keep pushing into
the 92.00 level. The sellers, on the other hand, will look for a break lower to
extend the drop into the major trendline. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Tomorrow we get the US December Retail Sales and the US Employment Cost Index
data. On Wednesday, we have the US NFP report. On Thursday, we get the US
Jobless Claims figures. On Friday, we conclude the week with the US CPI report.
