Silver Plunges After RBA’s Monetary Policy Statement

Silver inched lower on Friday, decreasing the price of white metal to less than $17.75 an ounce following the release of some key economic news. The technical bias remains bullish because of a higher high in the ongoing upside move.

Technical Analysis

As of this writing, the precious metal is being traded near $17.57 an ounce. A support can be noted around $17.36, the trendline support area ahead of $17.00, the psychological number and then $15.62, the swing low of the last major downside move as demonstrated in the given below daily chart.

On the upside, a hurdle can be noted around $17.86, the 50% fib level ahead of $19.00, the confluence of psychological number as well as swing high of the last major upside rally. A break and daily closing above the $19.00 resistance area shall incite renewed buying interest, validating a move towards $25.00 an ounce. The technical bias shall remain bullish as long as the $15.62 support area is intact.

RBA Monetary Policy Statement

It is highly unlikely that Australia’s economy entered a recession over the second half of last year, the Reserve Bank has concluded in its latest economic update. However, the bank also used its latest quarterly Statement on Monetary Policy to warn that “a widespread downturn in the housing market” is a “low-probability downside risk”. Before looking far forward in its projections for the next two years, the RBA had to acknowledge errors of the past, with the September quarter’s 0.5 per cent economic contraction pulling all its near-term GDP forecasts around 1-percentage-point lower.

Trade Idea

Considering the overall technical and fundamental outlook, buying the precious metal around current levels appears to be a good strategy.'
Usman Ahmed

Usman Ahmed is an individual forex trader and market analyst. He holds a Masters of Business Administration (MBA) degree. His work includes fundamental and technical reports on various currency pairs, commodity futures and stock markets. His technical analysis features price action strategies.

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