- Silver prices continue to work higher, challenging the 200-day
- Remains constructive above a pair of trend-lines
- Econ events tomorrow could shake things up
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Silver prices continue to work their way higher, now well above the neckline of the inverse H&S currently in play, above the July trend-line; contending with the 200-day MA for the past couple of sessions. If the move up is to continue, then this widely-watched moving average shouldn't present much of a problem for much longer.
There lies just overhead the upper parallel belonging to the trend-line off the December lows; we'll need to keep an eye on how the market responds on further testing. It was very near the high the other day, but as an upward sloping line it not only will be a rising moving target, but is considered resistance of only a minor degree. The area surrounding 18.50 is our primary concern as resistance until the target at 19 is met. The 19 line is not only the peak in November, but also equals the measured move target based on the depth of the inverse H&S.
The US dollar has been grinding higher along with silver, an acceleration by the dollar may stop silver in its tracks; conversely, a sudden drop will help bolster precious metals. We're keeping an eye on the dollar, but not making it our focal point.
As long as silver remains above the July and December trend-lines and the neckline, the nearly two-month long uptrend remains well intact. A pullback here into might even be a good thing to reload for another shot higher.
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Heads up: Today and tomorrow Janet Yellen will be appearing before the Banking and House panel. Tomorrow also brings U.S. inflation and retail sales data. So, while markets may be somewhat dull today, tomorrow could be a busy day. See the DailyFX Economic Calendar for details.
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---Written by Paul Robinson, Market Analyst
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