fundamental overview
Silver came under fresh pressure on Tuesday after a slight scare in the market following Iran’s refusal to participate in Islamabad talks due to the US blockade in the Strait of Hormuz.
Most of the damage was mitigated after Trump extended the ceasefire to give Iran more time to put forward a proposal to end the war, but the blockade was not lifted. There is no time limit for this latest expansion, so we may be stuck in this new situation until the bombs start falling again or a compromise is finally reached.
For now, the short-term bias is bearish neutral as we head into the weekend without clear signs of improved relations and global rate hike expectations continue to trend upwards. The negative side should remain limited amid positive expectations due to the indefinite ceasefire.
Looking ahead, a resolution should trigger a rally towards the 96.00 level, while a return to fighting will likely push prices to new lows.
Silver Technical Analysis – Daily Time Frame
Silver – Daily
On the daily chart, we can see that silver fell below the key level of 78.00 and opened the door to new lows. Sellers piled on the break lower, targeting the key upward trend line around the 67.00 handle. If the price reaches there, we can expect buyers to step in with a defined risk below the trendline to position a rally in the 96.00 handle. On the other hand, sellers will look for a break to extend the decline to the next trendline around the 55.00 level.
Silver Technical Analysis – 4 Hour Time Frame
Silver – 4 hours
On the 4-hour chart, we can see that the price has broken below the above trend line which was defining the bullish momentum. The first natural target for sellers should be the swing level at 72.55. This is where we can expect buyers to step in with a defined risk on the downside to position a pullback to the 78.00 resistance level. On the other hand, sellers will look for a break into the 68.00 handle next to increase bearish bets.
Silver Technical Analysis – 1 Hour Time Frame
Silver – 1 hour
On the 1-hour chart, we have a small downtrend line defining the current bearish momentum on this time frame. Sellers will likely continue to rely on the trendline to push to new lows, while buyers will look for a break to extend the pullback to the next downward trendline around the 77.00 level. The red lines define the average daily range for today.
upcoming catalyst
Today we will get the latest US jobless claims data and US PMI, but the market’s focus remains on the US-Iran headlines.
