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The silver price continued to move sideways on Wednesday, forming a continuation pattern of the bear flag. Copper prices recovered and contributed to the upturn Silver prices. IHS’s stronger-than-expected PMI production numbers helped propel US Treasury bond yields, boost the dollar and add some headwind to silver prices. Gold prices also moved sideways and kept the precious metal complex in a range.
Technical analysis
Silver prices continued to consolidate and form a bear flag pattern. This type of pattern is a break that is updated downwards. After moving down, prices move sideways forming a flag pattern (this type of flag is upside down) and if trendline support is broken, prices will fall. Support near an upward sloping trendline at 25.17. Resistance is seen near the 100 day moving average at 26.59. The 10-day moving average is expected to fall below the 50-day moving average, which means that there is a short-term downtrend. The short-term momentum has turned positive as the fast stochastics generated a crossover buy signal. The fast stochastic also prints a value of 10, below the oversold trigger level of 20, which anticipates a correction. Medium-term momentum is negative as the Moving Average Convergence Divergence (MACD) histogram prints with a bearish price in the red, indicating lower prices.
Inflation may not be that high
Last week the Fed changed its scatter charts, which boosted US Treasury bond yields. On Tuesday the Fed chairman retracted some of these statements. The Fed chairman said the Monetary Policy Committee compared inflation in May to pre-pandemic inflation to measure how much prices rose before the lockdowns. During this time, gasoline prices fell along with building materials as activity declined. Viewed from this perspective, inflation is closer to 2% than the most recent 5% year-on-year inflation reported by the Department of Labor’s CPI.
These items was originally published on FX Empire
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