FUNDAMENTAL OVERVIEW
Silver has come under renewed pressure on Tuesday after the markets got a bit scared following Iran’s refusal to participate in the Islamabad talks due to the US blockade in the Strait of Hormuz.
Most of the losses were then pared after Trump extended the ceasefire to allow more time for Iran to put forward a proposal to end the war but didn’t lift the blockade. There's no deadline for this latest extension, so we might just get stuck in this new situation until the bombs start dropping again or they finally reach a deal.
For now, the short-term bias is neutral to bearish as we head into the weekend without clear signs of improved relations and the global rate hike expectations keep capping the upside. The downside should remain limited amid positive expectations due to the indefinite ceasefire.
Looking ahead, a resolution should trigger a rally towards the 96.00 level, while a return to fighting will likely send prices into new lows.
SILVER TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can see that silver fell below the key 78.00 level and opened the door for new lows. The sellers piled in on the break lower targeting the major upward trendline around the 67.00 handle. If the price gets there, we can expect the buyers to step in with a defined risk below the trendline to position for a rally into the 96.00 handle. The sellers, on the other hand, will look for a break to extend the drop into the next trendline around the 55.00 level.
SILVER TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can see the price broke below the upward trendline that was defining the bullish momentum. The first natural target for the sellers should be the swing level at 72.55. That’s where we can expect the buyers to step in with a defined risk below the level to position for a pullback into the 78.00 resistance. The sellers, on the other hand, will look for a break to increase the bearish bets into the 68.00 handle next.
SILVER TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we have a minor downward trendline defining the current bearish momentum on this timeframe. The sellers will likely continue to lean on the trendline to keep pushing into new lows, while the buyers will look for a break to extend the pullback into the next downward trendline around the 77.00 level. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Today we get the latest US Jobless Claims figures and the US PMIs, but the market focus remains on US-Iran headlines.
