Spot silver prices have dropped below the $26 mark amid a lack of market fundamentals supporting the upside. Indeed, silver prices (XAG/USD) have seen accelerated selling after US Industrial Production and Capacity Utilization fell in February.
Industrial Production came in at -2.2%, which was below the consensus of 0.4% and also less than January’s 1.1%. The Capacity Utilization rate fell from 75.5% in January to 73.8% in February; a figure which was also short of the market consensus number of 75.6%.
Furthermore, renewed USD strength in the first hour of the New York session has aided in driving prices lower. There is no influence from the range-trading 10-year US government bond yield asset, and most players are holding off until the FOMC decision on Wednesday.
Technical Levels to Watch
The consolidation area within which the silver price action trades is a bearish pennant. The pole of the pattern extends from the 23-25 February high to the 3 March low, at which point the pole entered the consolidation area.
Today’s silver price activity has been rejected at the upper border of the pennant, reinforced by the resistance of 26.325. Bears would be looking for a breakdown of the pennant, with a projected price move towards the 24.559 support level. This move would need to take out 26.034 and 25.386 along the way, as well as a potential pitstop at 25.000.
On the other hand, the bulls need to break 26.325, with a move to 26.868 for the bearish pennant to be invalidated. An extension of the advance brings 27.502 into the picture, with 28.073 completing the possible short-term targets to the north for the silver price bulls.
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Silver Price Daily Chart
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