After the magnificent run from March to May, silver has been retreating since early May as debt ceiling and recession risks fade. The downward move extended as much as 22, just below the Fibonacci 61.8% retracement level. Additionally, the 21.40 – 22 zone has been a key support and resistance zone for silver over the medium to long term.
After testing the 22 support, silver experienced an upward reaction to the 50% level at 23. The next two weeks will be important for silver as a lot of data is incoming from the US, such as GDP, PCE, housing data, and the jobs report next Friday. As Fed members increase their focus on economic data ahead of deciding for further hikes, price movements could become choppy. The Fibonacci 61.8% and 76.4% levels could recreate the key support zone of 21.40-22. As long as this zone holds, any downward moves could create buying opportunities. However, traders should also be aware that since May, silver has been in a downtrend. Long positions during downtrends can be a balance destroyer without proper stop-loss levels.
