Silver Looking To Gain More Ground
San Francisco (Feb 16) Silver has been moving upward aggressively in the past few days as it looks to extend heavily on the metal rally that has been aggressive in the markets. This market movement has been brought about by speculation that the American economy may be weaker than first expected by many analysts, as forecasts so far have not been met by official data. This includes unemployment, retail sales and manufacturing – all major events on the market calendar.
Silver for the most part has been playing heavily on the technical aspect of things, and with a weaker US dollar, it seems that upward momentum is certainly playing a part on the metal.
Currently Silver has pushed through the 38.2 fib level, which has acted as resistance in the past. It looks likely, given the upward sloping trend line and the aggressive nature of the metal movements, that the 50.0 fib line will likely be the next point to watch.
Certainly, any major movements are helped by fundamental news, and later tonight, U.S Industrial Production and Consumer Confidence are due out for the month of January. Forecasts are relatively weak in the wake of feeble US data, and any data below forecasts could certainly push it higher, even breaching the 21 dollar mark.
Resistance is looking strong at 20.81. Additionally, the 50.0 fib level is strong and should be watched for pullbacks and the next level which might hold out against some upward momentum. Additionally, the current trend line should be treated as dynamic support for intra-day movements. Support levels can be found at 20.29 and 19.98, and are expected to be strong in the event of a breakdown through the current trend line as the market searches for consolidation.
Overall, markets seem very bullish when it comes to metals, and I expect that Silver’s run will continue for the mean time. It would take strong U.S economic data to turn this around, and for now it’s best to focus on the technicals which are very strong in the metal markets.