Silver price action has halted its advance after tensions between the US and Iran cooled off last week. Focus has now shifted to the US-China trade front, where the Chinese delegation is expected to arrive in New York for the expected Wednesday signing of the US-China Phase I trade deal.
The signing of this deal would bring huge relief to the markets and companies which have borne the brunt of exposure to the trade headlines. But for silver traders, signing of the US-China phase 1 deal will exert a risk-on effect on the market, which is expected to cause a cooling in silver price.
Silver price experienced quite an upsurge as the US-Iran tensions provided good fundamental backup to the falling wedge on the daily chart, allowing XAGUSD to complete the measured move from the breakout point on the upper border. The measured move pushed price beyond the 18.6536 price level temporarily, before the US Dollar got some strength after the NFP report of Friday. This allowed silver price to retrace from this resistance level to the 18.1468 support. Price broke below this support on Friday afternoon and attempted a pullback to the upside, This move was however resisted by the role reversal action of the 18.1468 support line, now acting as a resistance.
Price is now bearing down to the next support level, which is seen at 18.01498, where we also see a previous high on 2 May 2016. A breakdown of this price level will open the door for silver price to aim for the 17.41483 price level. Further support lies at 16,8048 as well as at 16.5888.
To the upside resistance lies at 18.1468. This price level has to be breached to the upside for the unblemished resistance at 18.6536 to come into renewed focus.