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Silver prices whipsawed initially moving higher following a weaker than expected U.S. private payroll report. During this period the dollar moved lower and bong yields dropped. Later in the U.S. trading session, the ISM released a better than expected services report which reversed the trade weighing on the yellow metal and buoying the greenback. Copper prices moved lower but failed to weigh on silver.
Silver prices whipsawed but failed to gain traction. Support is seen near the 10-day moving average at 25.27. Resistance is seen near the July highs at 25.80. Short-term momentum has flip-flopped, turning negative after turning positive on Tuesday as the fast stochastic generated a crossover sell signal. Medium-term positive momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This scenario occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line).
The U.S. Service Sector Remains Strong
According to the Institute of Supply Management, its non-manufacturing activity index surged to 64.1 in July, the highest reading in the series’ history, up 4-points from 60.1 in June. Expectations were for the index to edge higher to 60.5. The ISM survey’s measure of new orders increased to 63.7 from 62.1 in June. One key issue is that strong demand is continuing to strain supply chains. The survey’s measure of supplier deliveries rose to 72.0 from a reading of 68.5 in June. With bottlenecks in the supply chain persisting, input prices are rising.
This article was originally posted on FX Empire