Silver extended upside movement on Thursday, for the 8th day in a row as bulls gain momentum. The white metal is expected to test the key resistance area in the near future, an upside breakout through trendline resistance could open doors for a stronger bullish momentum, targeting the $22 resistance area. The long term sentiment remains bullish due to Higher Low in the recent correction phase.
As of this writing, the precious metal is being traded near $19.24 an ounce. A hurdle can be seen around $19.50, the trendline resistance as demonstrated in the following chart. A break and daily closing above the trendline will incite renewed buying interest, validating a rally towards the $20.83 and then $22.00 resistance levels.
On the downside, the metal is likely to find a support near $18.66, the swing low of the previous wave. A break and daily closing below the $18.66 support area will invalidate the double bottom price pattern, spurring a new wave of correction which could break the $18.00 handle.
US Jobless Claims
The US labor department will release the jobless claims report today. According to the median projection of various economists, the total number of people claiming jobless incentives (also known as continuing jobless claims) remained 2.598 million during the week ended on May 30 as compared to 2.603 million in the week before. Generally speaking, higher jobless claims are considered negative for the economy because they show higher unemployment in the labor market, hence worse than expected actual outcome will be seen as bullish for silver and vice versa.
Buying the precious metal on a daily closing above the trendline resistance appears to be the most suitable option as per technical and fundamental analysis, the trade should however be closed on a daily closing back below the trendline.