Silver is holding range on Wednesday ahead of all important interest rate decision by the Federal Reserve following the two-day long Federal Open Market Committee (FOMC) meeting. A surprise rate hike may incite steep fall in commodity prices including silver.

Technical Analysis

As of this writing, the white metal is being traded near 15.26. A hurdle may be noted near 15.50, the confluence of horizontal resistance as well as psychological number ahead of 15.81, the swing high of the last major upside rally as demonstrated in the following chart.

On the downside, the precious metal is expected to find a support near 15.14, the swing low of the last major downside move ahead of 15.07, a major horizontal support on the daily chart. The technical bias will remain bullish in short term as long as the 15.14 support area is intact.

Fed Rate Decision

Expectations are the Fed will keep interest rates pegged at 0.25%-0.50% with the Fed potentially laying the groundwork for rate hikes at perhaps as many as three additional meetings this year. When the Fed signaled last December that it expects to raise rates four times in 2016, markets anticipated that the March meeting — followed by the all-important Yellen presser to explain the decision — would be one of them. But over the past few months, expectations for higher rates have tumbled as shown by the Fed Funds futures market.

The Fed sounded dovish in its last statement in January when it left the benchmark rate unchanged, saying economic growth had “slowed” from being “moderate,” and said it expected inflation would remain low in the near term.

Trade Idea

Considering the overall technical and fundamental outlook, silver is still very bearish in the long run thus short trades on every rally are still preferred.

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