Silver at An Inflection Point!Silver is currently at an inflection point. The industrial/precious metal has held major support as of late, adding a layer of optimism to traders and investors alike. Moving forward, we will need to continue to hold this major support level to keep our optimism intact.
Headwinds:
This week will be an inflection point for the silver market. Not only are we hovering right above support, but the 50-day and 200-day EMAs have converged, adding a 'wall' of resistance that is imperative to break through.
Why is this week an inflection point? This week entails the release of many labor market data points, including JOLTs, ADP Nonfarm, NonFarm, The Unemployment Rate, and Average Hourly Earnings. The labor market has been extremely resilient despite economic growth concerns. If some of this data comes in weaker than expected, it is likely we would see a repricing of interest rate cut expectations, fueling the metal's momentum to the upside.
Chinese Economic Rebound?
China is the largest consumer of silver globally. A rebound in the Chinese economy will be imperative. The PBOC has already taken drastic monetary accommodation measures by cutting interest rates. If conditions can stabilize, this will be a bullish tailwind for Silver. Silver is currently holding above support despite weakness in China. This is very encouraging to see, leading us to believe that the worst of the Chinese economy is already priced in.
Check out CME Group real-time data plans available on TradingView here: www.tradingview.com
Disclaimers:
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
