Silver Technical Update
XAG/USD (Silver) Daily Chart 5/16/2012 1:55PM EDT
Silver has been persistently bearish. Commodity prices, gold and silver have all been in a downtrend as the USD surges in the risk aversion environment in May. The moving averages are in bearish orientation, and the RSI is below 30. This means the market is bearish, but maybe in the short-term is a bit stretched to the downside. Can we expect a pullback?
Note in the weekly chart that as the market approaches 26.10, it is trading near the 2011 low, and an established support pivot during this year and almost half of consolidation (triangle?). However, a break below 26.00 should suggest that the market is in a declining channel. The first target for this break should be 23.00, the 200-week SMA.
FOMC Minutes are out as I wrap up this article. the FOMC minutes came out
- inflation is controlled
- Participants identified several downside risks to the projected pace of economic expansion, including the fiscal and financial strains in the euro area and the possibility of an abrupt fiscal consolidation in the United States..
- no mention of stimulus.
Seems like a non-event at the moment. It is less dovish than the last minutes as well as the BoE inflation report, so the market may need to find another reason to hold off USD-strength, meanwhile, risk aversion should continue to boost the greenback and pressure commodities.
Fan Yang CMT is a trader, analyst, educator and the Chief Technical Strategist FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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