What’s inside:
- Silver price puts in big reversal day at resistance on NFPs
- Momentum should continue lower
- Big-picture symmetrical triangle could come into view down the road
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Friday’s March NFP headline miss (+98k vs 180k expected) sparked a big move in precious metals, especially in silver prices from an important inflection point. The sharp turn lower came from an attempt to break above a trend-line running from the November spike-high over the late-February high, as well as the high marks created from 2/27 – 3/1. The price action on Friday engulfed eight days of sideways price action, putting momentum in favor of lower prices. Silver is also back below the 200-day MA, which in the short-run may act as a ceiling as it had a floor not long ago.
Pulling back a bit and taking a look at the price swings since November, a symmetrical wedge could develop with time. It would require a move towards the December trend-line to bring this scenario further into view, and with Friday’s damaging reversal that seems like a distinct possibility. The lower-side of the wedge may align at some point with a back-side test of the July trend-line, a bridge we’ll cross should we see silver drop as anticipated.
It would require some work from here for the picture to turn more constructive, so we’ll focus on the short-side until we see something which suggests we should do otherwise.
Event risk: The calendar is fairly light this week in terms of high impact events which could move precious metals. For details please see the economic calendar.
Silver: Daily
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—Written by Paul Robinson, Market Analyst
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