Silver nosedived broadly yesterday by more than 60 cents to less than $20.30 an ounce. The precious metal however found a major support around the key level on Friday ahead of US Durable Goods Orders news. The long-term sentiment remains bullish due to higher high in the recent upside rally.
As of this writing, the white metal is being traded around $20.43 an ounce. A huge support can be noted around $20.30, the confluence of 38.2% fib level, lower trendline and 200 Simple Moving Average (SMA) as demonstrated in the following chart. A break and daily closing below the $20.30 support area could incite a renewed selling pressure, validating a dip below the $20.00 handle.
On the upside, the precious metal is expected to face a hurdle near $20.86, the confluence of trendline resistance as well as 50% fib level. A break and daily closing above the channel resistance could push the white metal into stronger bullish momentum, opening doors for the $21.57 resistance area.
US Durable Goods Data
The Census Bureau of the US is due to release the durable goods report today. According to the median projection of different analysts, the US manufacturers received 0.5% more durable goods orders in June as compared to -1.0% in the month before. Generally speaking, higher durable goods orders are seen as positive for the US Dollar (USD) hence a better than expected actual reading will be considered bearish for the price of silver.
Keeping in view the overall technical and fundamental outlook, buying or selling the precious metal on a breakout through the downward slope channel appears to be a good strategy in short to medium term. Not to mention, the long term bias will remain bullish as far as the $18.63 support area is intact.
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