Silver 1 OZ 999 NY (XAG=X) investors will be watching to see how the Fed assesses the impact of the coronavirus outbreak
Silver is essentially flat, down $0.07 or -0.38% to $17.73, as markets wait for Federal Reserve Chairman Jerome Powell to begin his semiannual testimony in front of the U.S. Congress at 10am EST.
Among other things, investors will be watching to see how the Fed assesses the impact of the coronavirus outbreak on economic growth in both China and globally. This information will help inform their decision on whether to cut interest rates at some point this year. Meanwhile, the U.S. dollar index keeps rising, hitting a new trend high again today.
Prices to Watch
A move above the six-day high of $17.87 will signal a breakout of the top trend line at the top of the channel and may give an early signal for a breakout of the channel. Caution is indicated as a breakout of a line by itself is not always reliable.
Further confirmation of strength should be seen shortly thereafter. Following a breakout of the line, first watch for a move above the $18.08 swing high, followed by an advance above and subsequent daily close above the $18.33 swing high.
Protect the Downside
Regardless of whether the overall pattern in silver looks bullish or not, the assessment could be wrong, or it could change quickly. Therefore, also keep in mind potential support areas. They include the long-term uptrend line, currently at around $17.21, followed by several Fibonacci price levels from $17.01 to $16.80.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 18.23.
The projected lower bound is: 17.03.
The projected closing price is: 17.63.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 31 white candles and 18 black candles for a net of 13 white candles.
An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend. It then signifies that the momentum may be shifting from the bulls to the bears.
If the engulfing bearish pattern occurs during a downtrend (which appears to be the case with PREC.M.XAG=), it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.
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 47.5300. This is not an overbought or oversold reading. The last signal was a buy 19 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 47.14. 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 24 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 -58. This is not a topping or bottoming area. The last signal was a buy 3 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 21 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAG= closed down -0.130 at 17.620. Volume was 8,900% above average (trending) and Bollinger Bands were 34% narrower than normal.
Open High Low Close Volume___
17.754 17.802 17.530 17.620 30,712
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 17.71 17.59 16.80
Volatility: 21 22 24
Volume: 3,071 614 154
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 4.9% above its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect very strong flows of volume out of XAG= (bearish). Our trend forecasting oscillators are currently bearish on XAG= and have had this outlook for the last 9 periods.