Silver extended upside movement on Monday, increasing the price of white metal to more than 16.80 an ounce as bulls gain strength. The technical bias remains extremely bearish because of a lower low and lower high in the recent downside move.

Technical Analysis

As of this writing, the precious metal is being traded near $16.83 an ounce. A hurdle can be seen around $17.00-$17.09 an ounce, the confluence of psychological number as well as a major horizontal resistance area as demonstrated in the given below daily chart. A break and daily closing above the $17.09 resistance shall incite renewed buying interest, validating a move towards $18.50 resistance zone.

On the downside, the precious metal is expected to find a support near $16.44, the low of today ahead of $16.16, the swing low of the recent downside move and then $16.00, the psychological number. The technical bias shall remain bearish as long as the $18.89 resistance area is intact.

US Goods Trade Balance

The US seasonally-adjusted goods trade deficit for October increased to $62.0bn from $56.5bn in September and was above expectations of a $59.2bn deficit for the month. The October deficit was also slightly above the $61.6bn deficit seen in October 2015. Exports declined 2.7% on the month with a 0.4% annual decline, which will cause some concerns over underling trends, although monthly data will inevitably be volatile. Overall imports increased 1.1% on the month and were unchanged from the previous year. There was a 1.9% increase in capital goods imports for the month, while auto shipments declined 2.1%.

Trade Idea

Considering the overall technical and fundamental outlook, selling the precious metal near $17.09 an ounce appears to be a good strategy if we get a valid bearish reversal candle near that level.

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