Silver prices continue to trade within the consolidation formed by the ascending channel, as the markets look for data that could sway price direction to either resume the correction or continue the uptrend. Tomorrow, the US will release industrial production and capacity utilization data, which could in the near-term, sway sentiment on the industrial metal.
Markets are projecting a rise in industrial production from 0.4% to 0.6%, with a corresponding increase in capacity utilization from 71.4% to 72.1%. Therefore, we would have to see some improvement beyond the consensus figures for silver price to continue the recovery that picks up from today’s bounce, following a few days of weakness.
Sellers would also be looking for figures that disappoint, so that price may continue out of the channel in a downward direction, to complete the bearish flag that appears on the daily chart.
Technical Outlook for Silver Price
Today’s candle has formed a pinbar, right at the channel’s trendline. Therefore, bulls will be looking for positive manufacturing data from the US on Friday for upside momentum that takes silver price towards 24.569. Further advance towards the channel’s return line also targets the 26.325 resistance. This move would negate the bearish flag setup, which is still in evolution.
On the other hand, disappointing data may provide sellers with the impetus to drive prices lower, targeting a breakdown of the channel. Such a breakdown would target 23.164 initially, with 22.387 and 20.734 as additional targets to the south. This move would complete the
price projection from the potential breakdown of the bearish flag pattern, extending the correction in silver price.
Silver Price (XAGUSD) Daily Chart
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