FUNDAMENTAL
OVERVIEW
Silver has been consolidating near recent lows after Fed’s
Williams and Fed’s
Jefferson delivered dovish comments, suggesting that there is no urgency to
raise interest rates again in October.
Their comments reinforced the view that the Fed has a limited appetite for
tightening, which is also consistent with the message from September’s dot
plot.
This could continue to support silver if the Fed remains more dovish than
markets expect, as real yields could decline due to inflation expectations rising
faster than nominal yields.
The main focus today is on the US NFP report. Given the recent comments
from Williams and Jefferson, we would likely need a blockbuster report, with
the data beating expectations across the board, to revive expectations for an
October rate hike. Such an outcome could trigger another hawkish repricing and
weigh on silver in the short term.
On the other hand, in-line or weaker than expected data would likely
reinforce the dovish repricing and provide room for silver to extend its recent
pullback.
SILVER TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that silverhas been consolidating around
the recent lows. If we get a retest of the broken support now turned resistance
around the 63.00 level, we can expect the sellers to step in there, with a
defined risk above it, to keep targeting the 55.00 handle. The buyers, on the
other hand, will want to see the price breaking higher to extend the pullback
into the downward trendline.
SILVER TECHNICAL ANALYSIS –
4 HOUR TIMEFRAME
On the 4 hour chart, we can
see the price is breaking above the minor downward trendline that was defining
the bearish momentum. This might be a signal of a bigger pullback to come. The
buyers will likely pile in around these levels, with a defined risk below the
lows, to position for a rally into the major downward trendline. The sellers,
on the other hand, will want to see the price falling back below the trendline
to extend the drop into new lows, with the 55.00 level as the first target.
SILVER TECHNICAL ANALYSIS –
1 HOUR TIMEFRAME
On the 1 hour chart, we can
see more clearly the consolidation around the lows. The buyers will likely look
for a rejection around the upward trendline or a break above the downward one
to extend the rally into the 63.00 resistance, while the sellers will look for short
opportunities around the downward trendline or on the break of the upward one
to position for a drop into new lows. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Todaywe conclude the week with the US NFP report.
This article was written by Giuseppe Dellamotta at investinglive.com.