fundamental overview
Silver has been outperforming gold recently amid headwinds such as low real yields, weak financial conditions, and a low US dollar. Momentum and volatility certainly haven’t been the same since the crash in late January. The main difference has been the Fed, which has moved away from its accommodative stance.
However, silver should remain supported amid positive expectations of the US-Iran deal, which could limit any downside.
Now everything depends on US-Iran talks. If the talks fail again, we could suffer a major blow, but as long as the ceasefire holds, the damage should be limited. On the other hand, a peace agreement could give another boost to silver, taking its rise to new highs. However, for silver to rally stronger, the Fed would need to take a dovish stance.
Silver Technical Analysis – Daily Time Frame
Silver – Daily
On the daily chart, we can see that silver continues its gradual rise amid positive US-Iran expectations. The natural target for buyers is the key swing level at 96.35. If the price reaches there, we can expect sellers to step in with a defined risk above the swing level for a decline to the 70.00 handle. On the other hand, buyers will look for a break to extend the bullish bets towards 120.00 level next.
Silver Technical Analysis – 4 Hour Time Frame
Silver – 4 hours
On the 4-hour chart, we can see that the price has broken above the key 77.98 resistance, opening the door to more upside. We have an upward trend line defining bullish momentum. If we get a pullback in the trendline, we can expect buyers to hold on to it with a defined risk below it to reach new highs. On the other hand, sellers will look for a break of the key trendline on the downside around the 67.50 level.
Silver Technical Analysis – 1 Hour Time Frame
Silver – 1 hour
On the 1-hour chart, the recent consolidation above the 77.98 level may have formed a bullish flag. We can expect buyers to step around the lower boundary of the pattern to reach new highs and increase bullish bets on a break above the upper boundary of the flag.
On the other hand, sellers will look for a break below the lower boundary of the flag to extend the pullback to the upward trendline and target a break below it. The red lines define the average daily range for today.
