silver price
Silver is trading lower this Wednesday after US Commerce Secretary downplayed comments by President Donald Trump’s on the US-China trade situation. This helped initiate cautious trade optimism on the day.
Yesterday evening, US President Donald Trump had said he would “just raise tariffs” if a US-China deal did not happen. Trump’s comments drove up risk aversion in the markets initially. However, things have cooled off today as US Commerce Secretary Ross indicated that he was confident of a US-China deal being done.
“We think there is hope we can get a deal with China done”, Ross was quoted as saying. “Deal is still a work in progress,” he added.
The recent price action on XAGUSD has formed a bearish pennant, which has bearish implications for future silver price potential.
The resolution of this pattern is for further downside to be seen on the XAGUSD, which would conform to risk-on expectations brought on by the signing of the Phase 1 deal.
A bearish breakdown of this pattern targets the silver price support levels at 16.81052 and 16.5888 initially, with further potential to reach 16.1572 if bearish momentum from trade optimism persists.
On the flip side, if it becomes impossible to reach a trade deal under current conditions, risk aversion may send silver prices to 17.4871 initially, with potential to reach 18.1053. This situation negates the bearish pennant.