In the second half of December, silver has significantly increased in price in view of the depreciation of the US currency and the growth in demand for low-risk assets.
The US dollar was losing its positions for the whole of December on the data from the US Fed, which decided to suspend tightening of monetary policy. An additional catalyst was negative data on inflationary pressures and the US labor market at the end of last year.
At the beginning of this year, the price of silver slightly adjusted down from a strong resistance level of 17.25 due to the fixation of a large volume of long positions and the growth of short ones at peak prices. In the future, the price of silver will move under the influence of trade sentiment and a fundamental data about the United States. On this trading week, one should pay particular attention to the data for key US indices.
Support and resistance
In the future, the price of silver is expected to form a lateral consolidation within the channel of 16.85–17.25. At a later stage, the upward momentum may increase, and the price of silver will rush to the levels of 17.45, 17.90. At the moment, the dollar has no fundamental support, which may indicate a further fall in the exchange rate of the US currency, in which case the commodities will continue to appreciate.
Technical indicators confirm the forecast, MACD on the D1 chart indicates the preservation of a high volume of long positions, the Bollinger Bands are directed upwards.
Support levels: 16.85, 16.75, 16.55, 16.10, 15.60, 15.10, 15.00.
Resistance levels: 17.10, 17.25, 17.45, 17.90, 18.30, 18.50, 19.00.
In this situation long positions may be opened from the current level with targets at 17.45, 17.90 and stop-loss at 16.70.
|Take Profit||17.45, 17.90|
|Support levels||15.00, 15.10, 15.60, 16.10, 16.55, 16.75, 16.85, 17.10, 17.25, 17.45, 17.90, 18.30, 18.50, 19.00|
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