FUNDAMENTAL OVERVIEW
Same as we saw for gold, yesterday we got a quick selloff in silver without any clear catalyst, although half of the losses were eventually pared back. The curious thing is that we saw the same price action across many other assets around the same time. It’s unclear what triggered those moves.
Today, the focus is on the US CPI report as it’s going to be a big risk event for precious metals. The market is pricing 58 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 silver selling off again and potentially reaching new lows.
On the other hand, a soft report shouldn’t change much in terms of near-term Fed policy, but it will keep the dovish bets in place which should act as support for silver.
SILVER TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can see that silver continues to consolidate between the trendline and the major swing high around the 92.00 handle. What level is going to be tested first will likely be decided by today’s US CPI report. There’s not much we can glean from this timeframe, so we need to zoom in to see some more details.
SILVER TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can see there’s not much we can see on this timeframe either, but the fact that we are making lower highs could be a dangerous signal for the bulls as a test of the trendline might have higher probabilities.
SILVER TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we have a downward trendline defining the bearish momentum on this timeframe. If the price pulls back to the trendline, we can expect the sellers to lean on it with a defined risk above it to position for drop into the major trendline. The buyers, on the other hand, will look for a break higher to pile in for a rally into the major swing level around the 92.00 handle. Watch out for the US CPI report today as it could trigger big moves in the market. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Today we conclude the week with the US CPI report.
