Silver extended downside movement on Friday, dragging the price of white metal to less than $14.30 an ounce. Not to mention, this is the 13th intraday plunge in a row which makes the ongoing slide to be the worst losing streak of 2015. The technical bias has already turned bearish because of a Lower Low in the current wave.
Technical Analysis
As of this writing, the precious metal is being traded around $14.26. A support may be noted around $14.00, the psychological number ahead of $13.96, the swing low of the last major dip and then $13.99, the low of the last year.
On the upside, the white metal is expected to face a hurdle near $14.48, the intraday high of yesterday ahead of $14.86, the 61.8% fib level and then $15.00, the psychological number. The technical bias will remain bearish as long as the $16.34 resistance area is intact.
US Budget Statement
The United States posted a budget deficit of $136 billion, up 12 percent from the same period last year, the Treasury Department said on Thursday. Analysts polled by Reuters had expected a $130 billion deficit for last month. The government had a deficit of $122 billion in October of 2014, according to Treasury’s monthly budget statement.
Differences in monthly calendar adjustments and outlays to account for benefit payments shifting into last month from November contributed to the widening of the deficit. Accounting for those adjustments would leave the October deficit at $80 billion, roughly the same level as the adjusted figure for October 2014. The current fiscal year-to-date deficit stood at $136 billion. Receipts last month totaled $211 billion, while outlays stood at $348 billion.
Trade Idea
Considering the overall technical and fundamental outlook, buying the white metal can be a good strategy if we get a valid bullish reversal candle on the four-hour timeframe.
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