Silver Bounces in the US-China Deal Signing Day
Silver bounced on Wednesday, boosted by the sign of the "phase one" agreement between the U.S. and China in Washington.
AUGUSD gains 11.9 cents or 0.67% touching at $17.918 per ounce, Gold advances $5.61 or 0.36% reaching at $1,552.03 per ounce, Palladium soars$56.68 or 2.59% climbing at $2,245.43 per ounce.
The representatives of the Chinese government in Washington will sign the most expected agreement between the two largest economies of the world on Wednesday.
The U.S. Treasury Secretary Steven Mnuchin commented on Tuesday that the U.S. government would maintain tariffs on Chinese products until the completion of phase two.
Technical Overview
Silver, in its 2-hour chart, exposes the corrective process of the rally that is developing since December 09th, 2019, when the precious metal found buyers at $16.53 per ounce.
Currently, the corrective structure suggests that the wave "a" of Minute degree labeled in black is complete. In consequence, the wave "b" should be in progress.
As known by the Elliott Wave theory, a corrective structure has three waves, where three internal waves make the second segment.
In other words, Silver should make an advance in three waves before complete the wave "b" of Minute degree labeled in black. Once this movement is finished, the precious metal could make a new bearish move in five waves.
On the other side, from the latest CFTC report, institutional traders informed that their sentiment bias continues being bullish. The net positioning reported in the past week reached 67,253 positions, being 3.55% lower than the positions informed on the previous report.
Concerning the market bias, institutions increased their positioning in the long side by 2,914 or 2.67%. In the same way, they boosted their trades in the short side by 5,389 contracts or 12.84%.
The significative increase in short positions compared with the long side makes us suspect the taking profit activity. However, the institutional traders' sentiment continues showing a bullish bias. It is likely that in the short-term, Silver develops new declines, which could allow us the incorporation in the long side.
Author
EagleFX Team
EagleFX
EagleFX Team is an international group of market analysts with skills in fundamental and technical analysis, applying several methods to assess the state and likelihood of price movements on Forex, Commodities, Indices, Metals and
