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Talking Points
- The short-term trend remains bullish above the April 13 low of $16.02, while yesterday's high of $17.25 is a near-term resistance level.
- One of the factors cited as supporting silver prices while gold has remained trapped to its range of around two months, is relative positioning between silver and gold.
- U.S. Existing Homes Sales are on deck today and expected to rise by 3.9% MoM from -7.1% in February.
The short-term trend remains bullish above the April 13 low of $16.02, which is the most recent swing low and is higher than the April 12 swing low of $15.82.
Potential support levels dictated by the Fibonacci retracement tool are $16.78 (38.2% pullback), $16.64 (50% pullback) and $16.49 (61.8% pullback). These levels are derived using the April 13 low of $16.02 and yesterday's high of $17.25 as reference points.
We do note that the $16.64 level, which constitutes a 50% pullback, is not actually a Fibonacci level, even though most Fibonacci retracement tools provide it and technical traders highlight it as being important.
Yesterday's high of $17.25 is a near-term resistance level, followed by the psychological level of $17.50 and the May high of $17.80. Over the last few days, we have been highlighting the May high as the next major resistance level beyond the critical October high of $16.38.
One of the factors cited as being supportive of silver prices while gold remains trapped to its range of almost two months, is the relative positioning between silver and gold. Currency Strategist Christopher Vecchio began discussing the interplay between Gold and Silver in his April 15 article, "Silver Prices Begin to Outpace Gold - Not a Good Sign for USD." Likewise, for more information on the Gold/Silver ratio discussed in this piece, please read his report from yesterday, April 19, "Silver-Gold Relationship Evolving in a Bad Way for US Dollar." You can see my version of this chart below.
U.S. Existing Homes Sales are on deck today and expected to rise by 3.9% MoM from -7.1% in February. The outcome may affect silver via the USD. A stronger than 3.9% Existing Home Sales rise may lend the USD support, whilst a lower than 3.9% outcome is likely to weaken it.
Our forecasts for Q2 2016 are now live on the site. Download them for free.
Silver Price | FXCM: XAG/USD
Created with Marketscope/Trading Station II ; prepared by Alejandro Zambrano
Silver /Gold Ratio
Created with Marketscope/Trading Station II ; prepared by Alejandro Zambrano
--- Written by Alejandro Zambrano, Market Analyst for DailyFX.com
Contact and follow Alejandro on Twitter: @AlexFX00
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
