The UK government continues to find itself under pressure as of late as the Brexit debacle continues and the ability to start trade talks becomes all the more stretched. The market was buoyed this afternoon though by the EU commissioner saying that talks were positive and making progress. It's unlikely though that any real breakthrough will come unless we see the DUP come to the party, and thus far they've been playing a hard game of politics for Theresa Mays government. If we do see the DUP flying to London it's expected it will mean a deal has been reached and it's likely we could see positive moves for the GBPUSD. At the same time politics is fickle as we've seen and nothing is done until it's signed and sealed - and the potential for a change of government is looking all the more worrying as of late as well.
While the pound has rebounded it has came up short of resistance at 1.3438 before jumping through on news of potential progress. Positive news on Brexit progress has so far sent the pound higher and there is potential to extend higher to 1.3523 and 1.3588, but at the same time it will depend on the agreement that is struck with the DUP and the mess it will likely make. If we see a failure to progress anything then it could lead to a massive loss of confidence and it's likely that the GBPUSD will move rapidly lower towards support at 1.3256 and may even look to test the trend line that is in play. Any complete breakthrough here and close below it may signal the bears to take control again.
Silver has continued to slide down the charts as the bears look in complete control as of late. It is almost a perfect storm scenario at present for silver as commodities are becoming less popular due to the advent of Bitcoin for speculation, and also market believing the good times will continue. Throw in on top of this a rising USD and it's been tough if you're a silver or gold bug as of late. There is potential for price action to improve for silver, but right now it's not looking good just yet as the bears are swiping hard.
The silver stretch lower is starting to show signs of being overstretched, with the current Bollinger Bands showing that it's testing the current limits quite severely. Is there a bottom at present? Potentially at 15.556 which has been a key level and could be a target for the bulls to come back into the market. If we see a failure here though to stop the advance then 15.118 looks to be a key contender on the charts to cause a pause. If we see a bounce back higher look for strong resistance at 15.996 and 16.323. It's clear a bearish trend is key and even if we see a bounce at 15.556 I would be weary of the old dead cat bounce which can happen in markets like these.
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