Price is firmly trapped in the $13.61 to $14.40 range making it hard to know what will happen next. But we know price will usually react as it reaches the edges of this trading range.
Range traders will most likely short-sell silver as it reaches $14.25 with stops above the December 28 high of $14.40, take profit orders will be placed near this week’s low of $13.73. Where traders book profits on short positions, they will also turn long with stops below the December low of $13.61.
Longer-term trend followers and macro traders betting on a stronger dollar will apply a similar strategy, but will keep a short-position from $14.25 for break of the December low at $13.61. When and if price breaks $13.61, it will trigger yet another sell signal, which may take price to the October 19, 2009 low.Some traders will use this signal to add to their bearish positions.
For now price is not reacting to any of the major stories, as stock markets declining. Data on tap today isU.S Jobless claims at 13:30 GMT; a Bloomberg survey projects will decline to 275K from 277k. I don’t expect the data to break the range.
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Silver | FXCM: XAG/USD
Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano
--- Written by Alejandro Zambrano, Market Analyst for DailyFX.com
Contact and follow Alejandro on Twitter: @AlexFX00
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