Silver Price Prediction – Prices Rebound but Appear Rangebound
Silver prices rebounded on Wednesday as the dollar took a hiatus from the rally. Since silver is priced in U.S. currency, a weaker greenback generally buoys silver. The dollar eased despite mortgage applications rising. Stronger than expected retail sales and industrial production have coincided with robust inflation and falling sentiment. This news has capped recent upward momentum in silver prices.
Technical analysis
Silver prices slipped on Monday. Prices have formed a reverse head and shoulder pattern, which is a bottoming breakout pattern. Support is seen near the 10-day moving average at 24.69. Target resistance is the August highs at 26. Short-term momentum has flip-flopped and turned positive as the fast stochastic generates a crossover buy signal. Medium-term momentum has also turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This scenario occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD line). The MACD histogram is printing in positive territory with an upward sloping trajectory which points to higher prices.
Housing Data Remains Stable
The economic outlook remains solid, as robust retail sales and industrial production backed up strong inflation. Housing data remains strong. Mortgage applications to purchase a home rose 2% for the week but were 6% lower than the same week one year ago.
This article was originally posted on FX Empire
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