Silver bears wrong footed at start of the week on soft dollar
- Bears were caught off guard on this sudden switch up in price.
- Bears can target a close below 21-D SMA and S2 at 14.36 while price is below recent highs.
Silver prices had been capped last week in their advance from the November lows with a bearish daily candlestick of which bulls have bought into on Monday taking Silver back above the pivot line. Spot is currently trading at 14.63, up from 14.45 lows and below the high of the session located at 14.72.
The mood at the start of the week is poor and risk has been soured by ongoing concerns over global growth outlooks. The Dow fell 400 points amid worst start to December since 1980 which has helped the precious metal higher as an alternative to stocks. At the same time, major currencies firmed vs USD ahead of upcoming Fed rate announcement on Wednesday which helps the commodity complex. The dollar is on the backfoot as investors presume that the Fed will be dovish this meeting around making for a dovish hike.
Fed needs to 'take the Victory!'
Pres Trump tweeted today:
"It is incredible that with a very strong dollar and virtually no inflation, the outside world blowing up around us, Paris is burning and China way down, the Fed is even considering yet another interest rate hike. Take the Victory!"
- Support levels: 14.47 14.36 14.21
- Resistance levels: 14.73 14.88 14.99
The bears were caught off guard on this sudden switch up in price after the daily doji and a very strong daily close the following day. However, so long as the price remains below 14.73 R1, on a break below the 21-D SMA with a close which is located at 14.47, bears can target S2 at 14.36 which is a 50% Fibo level as well. The 61.8% is located at 14.25.