Silver 1 OZ 999 NY (XAG=X) Investors are keeping a close eye on the Federal Reserve
Silver prices are almost unchanged for a second straight day. In the European session, silver is trading at $16.63, up $0.04 or 0.26% on the day.
After a sharp drop on Friday, silver has settled down this week. The metal fell 2.3% on Friday, after a robust nonfarm payrolls report raised risk appetite and sent safe-haven silver to lower ground. Silver touched a low of 16.51 on Friday, its lowest level in four months. In economic news, the U.S. releases consumer inflation reports for November. CPI is expected to dip to zero, after a gain of 0.2% in the previous release. The core reading is projected to remain steady at 0.2 percent.
Fed Expected to Stay on Sidelines
Investors are keeping a close eye on the Federal Reserve, which will conclude its 2-day monthly policy meeting on Wednesday. It’s a virtual certainty that the Fed will maintain the current benchmark rate. The Fed has signaled a pause in rate cuts, and none are expected in the first quarter of 2020. This means that the upcoming rate statement and comments from senior Fed officials will carry great weight and could have a significant effect on the movement of precious metals, such as silver and gold. With the U.S. also releasing consumer inflation numbers ahead of the FOMC rate decision, we could see some stronger movement from silver on Wednesday.
Silver Technical Analysis
With silver drifting this week, our technical breakdown remains in place. The line of 16.90 has switched to a resistance role, after silver broke below it on Friday. The 200-EMA is at 17.20, followed immediately by resistance at 17.25. On the downside, the 50-EMA line is touching the candlesticks at 16.56. This is followed by support at 16.50, which has held firm since August.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
The projected upper bound is: 17.19.
The projected lower bound is: 16.10.
The projected closing price is: 16.64.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 23 white candles and 27 black candles for a net of 4 black candles.
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 13.2829. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 12 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 40.40. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 68 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -157.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 19 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 2 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAG= closed up 0.055 at 16.656. Volume was 8,900% above average (trending) and Bollinger Bands were 59% narrower than normal.
Open High Low Close Volume___
16.620 16.713 16.530 16.656 37,226
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 16.85 17.31 16.24
Volatility: 23 20 24
Volume: 3,723 745 186
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
PREC.M.XAG= is currently 2.6% above its 200-period moving average and is in an downward trend. Volatility is low as compared to the average volatility over the last 10 periods. Our volume indicators reflect very strong flows of volume into XAG= (bullish). Our trend forecasting oscillators are currently bearish on XAG= and have had this outlook for the last 22 periods.
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