Summary:

• Silver has printed 2 bearish reversal signal in the past 2 days
• These signals have come at a confluence of possible resistances
• Market could be highly sensitive to tomorrow’s NFP release 

There has been a small rise seen in Silver today, but recent trade has seen some worrying developments for longs in this market. The precious metal has enjoyed a good run up over the past month after something of a capitulation at the start of July but the recent price action could be seen to suggest that the market is now set to resume its downtrend. 

The region around 16.90 has two potential reasons why it may be viewed as resistance. Firstly, it has acted as something of a swing level when traded near recently with the polarity switching from support to resistance on several occasions. Secondly a falling trendline from the peak seen back in April is also now residing in this area and therefore any reversal signals around here could have greater importance. 

Tuesday produced the first such reversal signal with a bearish engulfing candlestick before yesterday’s trade saw a false move higher swiftly rejected and an inverted hammer printed on D1. Taken together, and also considering the level at which they occurred this could be seen as a fairly strong sell signal from a technical point of view. As long as price remains below Wednesday’s high of 16.91 then this setup will remain valid. 

 

 Silver has produced a potential sell signal close to a possible resistance zone.

Looking ahead to events that could impact this market, tomorrow’s NFP could have a major impact. If we look at the prior NFP release back in July that day saw the swoon lower. Whilst the sharpest move occurred ahead of the release the data also saw a significant reaction with a large beat in the headline causing more sellers to step in. Therefore this market could be an interesting one to keep an eye on in the coming 24 hours heading into the weekend.