Silver rallied sharply yesterday, increasing the price of white metal to more than $17.25 an ounce and leaving a large bullish candle on daily chart which was closed above the trendline resistance area following the release of some key economic news. The technical bias remains bullish because of a higher high in the ongoing upside move.
As of this writing, the precious metal is being traded near $17.48. 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.
On the downside, the precious metal is expected to find a support 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 above daily chart. The technical bias shall remain bullish as long as the $15.62 support area is intact.
US Consumer Confidence
U.S. consumer confidence fell more than expected in January, dampening optimism over the outlook for the consumption-driven economy, industry data showed on Tuesday. In a report, the Conference Board, a market research group, said its index of consumer confidence fell to 111.8 this month from a reading of 113.3 (revised from an initial 113.7) in December which had been its highest level since August 2011. Analysts had expected the index to decrease to 113.0 in January. The Present Situation Index increased from 123.5 to 129.7, but the Expectations Index decreased from 106.4 last month to 99.8.
Considering the overall technical and fundamental outlook, buying the precious metal around current levels appears to be a good strategy.