FUNDAMENTAL
OVERVIEW
Silver has remained
supported since the FOMC decision as the market has faded the hawkish
overreaction. As a reminder, the Fed projected a less hawkish path for interest
rates than the market was pricing and Fed Chair Warsh mostly repeated the points from his Jackson Hole
speech.
Moreover, the
recent fall in oil prices amid expectations of de-escalation has helped ease
inflation and rate hike concerns, offering further support for precious metals.
Just earlier, Kyodo
reported that Iran offered to reopen the Strait of Hormuz within seven days if
the US eases its naval blockade.
The timing is
particularly important. Trump is meeting with Gulf leaders in New York to
discuss the conflict, while Qatar and other regional governments are pushing
for renewed dialogue with Iran. Qatar has said it is seeking even a temporary
agreement that could restore navigation through Hormuz and create conditions
for renewed negotiations.
Keep in mind that
a de-escalation would continue to put pressure on oil prices, further easing
inflation and rate hike concerns. This should keep silver supported into new
highs.
Economic data will
also be important given the current market’s pricing. When positioning and
market expectations become stretched, even a modest shift in the data can
trigger a significant reversal. If US data starts surprising to the downside,
expectations for aggressive rate hikes will likely be reduced, giving silver an
additional boost.
SILVER TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that silver rebounded
from the major 63.00 support before pulling back from the 67.00 level. If we
get another pullback into the 63.00 support, we can expect the buyers to step
in with a defined risk below the support to position for a rally into the 71.50
level. The sellers, on the other hand, will want to see the price breaking
lower to pile in for a drop into the 55.00 handle next.
SILVER TECHNICAL ANALYSIS –
4 HOUR TIMEFRAME
On the 4 hour chart, we have
a minor support zone around the 65.00 handle. This is where we can expect the
buyers to step in with a defined risk below the support to keep pushing into
new highs. The sellers, on the other hand, will look for a break lower to
extend the pullback into the 63.00 support next.
SILVER TECHNICAL ANALYSIS –
1 HOUR TIMEFRAME
On the 1 hour chart, we
have a minor downward trendline defining the recent pullback. If we get a rally
into the trendline, we can expect the sellers to lean on it with a defined risk
above it to keep pushing into new lows. The buyers, on the other hand, will
want to see the price breaking higher to increase the bullish bets into the
71.50 level next. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Today, we have Trump meeting with Gulf leaders and potentially with Iran’s
President at the UN General Assembly. Tomorrow, we get the Flash US PMIs. On
Thursday, we have the Trump-Xi meeting.
This article was written by Giuseppe Dellamotta at investinglive.com.