FUNDAMENTAL OVERVIEW
Silver prices jumped yesterday after the announcement of a two-week ceasefire as easing financial conditions supported a broader risk-on sentiment. However, those gains were later wiped out when Israel launched an attack on Lebanon, triggering backlash, with Iran insisting that Lebanon was included in the ceasefire agreement.
For now, the ceasefire is still holding, at least until tomorrow, when the US-Iran negotiations are set to take place in Islamabad. The talks could also be extended if both sides agree.
There’s still a risk that the conflict could restart at any moment, since the US and Iran have not officially ended the hostilities. Nonetheless, the short-term bias has turned more bullish for silver, as traders reprice the hawkish expectations. If the negotiations were to fail and the war were to resume, we can expect silver to drop back towards the monthly lows.
SILVER TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can see that silver bounced on the major trendline and pulled back into the swing low around the 78.00 level. That’s where the sellers stepped in with a defined risk above the level to position for a drop into the next major trendline around the 53.00 handle. The buyers will want to see the price breaking higher to increase the bullish bets into the 96.35 level next.
SILVER TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we have an upward trendline defining the bullish momentum. If the pullback extends further, we can expect the buyers to lean on the trendline with a defined risk below it to keep pushing into new highs. The sellers, on the other hand, will look for a break to increase the bearish bets into the monthly lows.
SILVER TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we have a minor support zone around the 73.00 handle. The buyers are stepping in around these levels with a defined risk below the support to keep targeting new highs. The sellers, on the other hand, will look for a break to increase the bearish bets into the trendline. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Today we get the US PCE price index and the latest US Jobless Claims figures. Tomorrow, we conclude the week with the US CPI report and the University of Michigan Consumer Sentiment survey. As a reminder, we have also the US-Iran negotiations in Islamabad tomorrow which is going to be more important than the economic data.
