Is There More To Come For This Silver Rally?
Blackwell Global | Mar 28, 2017 06:21AM ET
Key Points:
- ABCD wave could see further gains after a near-term moderation.
- MACD and EMA suggestive of general bullish trend in the long-term
- Fundamentals also supportive of extending bullish momentum.
Silver’s long-term uptrend may be due for a spell of moderation moving ahead as the metal prepares to make a final push higher in the coming weeks. Specifically, the combination of a number of technical forces is beginning to put pressure on silver prices, even if the general bias remains long-term bullish.
Firstly, if we take a look at the daily chart a few things become readily apparent. For one, the combination of the declining trend line and some highly oversold stochastic readings are practically begging for a reversal in the coming sessions. However, it’s also clear that this reversal will likely be short-lived and more of a moderating movement than a serious change in momentum. As a result, any near-term losses should be capped by the 23.6% Fibonacci level at around the 17.791 handle and the uptrend should resume around this point.
All this being said, what exactly is the evidence supporting continued bullishness over the coming weeks? Primarily, we would look to the fairly convincing ABCD wave that is becoming clearer on the above daily chart to support the argument for additional gains in silver prices. However, we can also see that the EMA bias and the MACD signal line crossover are supportive of this forecast which should see the metal pushing the 19.00 handle moving ahead. Gains beyond this price currently seem unlikely, given the robust zone of resistance present around this handle.
From a fundamental perspective, we have even greater reason to suspect that the uptrend will remain in place after a short period of moderation. Unsurprisingly, this has everything to do with Trump and the uncertainty his administration presents for the US. Indeed, only yesterday the Fed’s Evans spoke on how the recent failure of the GOP’s Healthcare bill demonstrates rising uncertainty and political risk in the US. As one would expect, growing unease over the stability of the world’s largest economy and military power has been a key driver of safe haven investment prices over the past weeks and this momentum doesn’t look like its ready to evaporate anytime soon.
Get The News You Want
Ultimately, the agreement of both the technical and fundamental forecasts discussed above present a fairly strong argument for a near-term slip followed by a resumption of the uptrend. In particular, the presence of the ABCD wave and the ongoing turmoil of the Trump presidency should be the two key drivers informing the metal’s movement and both should be monitored closely.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.