Silver testing its short term static resistance

• US indices rose last Friday and made a record close. DJIA gained 143.08 points or 0.58% to 24,651.74 and the Nasdaq Composite rose 80.06 points or 1.17% to 6,936.58. S&P500 closed at 2,675.81, up 23.8 points or 0.90%.  In Europe the DAX closed up 35.48 points or 0.27%, at 13,103.56.

• In the FX market EURUSD slid 0.24% to 1.1749 and GBPUSD closed at 1.3320, down 0.82%. USDJPY rose 0.18% to 112.60 while USDCHF rose 0.14% to 0.9905.

• Gold rose 0.28% to 1,256.44 $/oz and Silver rallied to 16.05 $/oz, up 1.03%.

Chart of the day

XAGUSD  (daily chart)

After the selloff Silver developed a short term trading range between 15.62-16.13 $/oz. The commodity could test soon the higher side of the range and in case of a breakout Silver could reach area 16.3 and then 16.50. Beneath 15.62 $/oz XAGUSD it may reach 15.18, the 100% retracement of the bullish wave started in July that ended in September.

Economic Calendar

The most relevant event during the European session will be the Eurozone CPI, expected at 1.5% and at 1% (core) (YoY).  Inflation below the ECB target (2%) would keep interest rates at the current level in the Eurozone for the next year. In case of an unexpected inflation spike, it will be relevant to assess whether the shock would be transitory or permanent. 

Technical Analysis

EURUSD (Daily timeframe)

EURUSD is making lower highs in the short term and in case of an increased selling pressure the rate could reach 1.1680 and then its November low at 1.155. Above the short term supply line EURUSD could test 1.20.

EURCHF  (Daily timeframe)

The rate is still trading inside the medium term bullish channel. Beneath the lower side EURCHF could slide to 1.1590 and then test 1.14.  Bullish pressure in case of a breakout of its 2017 high in area 1.1732, where EURCHF could rally to test the higher side of the channel.

FTSEMIB Index  (Daily timeframe)

The gauge is making lower highs and it testing the static support in area 22,050. Below this area the index could test its 200MA near 21,500 and then 21,000. In case of a breakout of its short term supply line the FTSEMIB could gain momentum to rise above its 2017 top.

USDCAD (Daily timeframe)

USDCAD developed a trading range in November and December but the higher side resistance is at risk of breakout . In case of a breakout of area 1.2940, that could be also overlapped with its 200 MA, USDCAD could rally to 1.3130, the 61.8% Fibonacci retracement of the bearish wave started last May. Below 1.2660 USDCAD could test 1.25.