SILVER TECHS: Monitoring Support

Swedish money market participant 5-year ahead CPIF inflation expectations were steady at 2.3% in April. While this series has moved away from the 2% target in recent months, in line with an acceleration in spot inflation pressures, the Riksbank will be relieved that the April survey did not report a renewed uptick. 

• In an interview with MNI earlier this month, Riksbank Deputy Governor Jansson said that rising trade tariffs are likely to depress economic growth, but while their effects on inflation may be short-lived monetary policymakers must be alert to any risk of price expectations becoming de-anchored.
• Jansson noted that while in theory the Riksbank would be able to look through elevated inflation if expectations remain stable in the near-term, Jansson highlighted the difficulties in practice of doing so and made the case for acting decisively if need be.
• One-year ahead expectations were also unchanged at 2.2%, while 2-year ahead expectations ticked up to 2.3% (vs 2.1% prior).
• 1-year ahead GDP growth expectations were revised sharply lower (1.6% vs 2.4% prior), likely reflecting US President Trumps reciprocal tariff announcements. 2-year ahead GDP growth expectations were 2.0% (vs 2.4% prior), and 5-year ahead expectations were 2.0% (vs 2.1% prior).
• As such, money market participants now expect a deeper Riksbank easing cycle over the next 24 months.
• The survey was conducted Apr 7-Apr 11.

• RES 4: $34.903 - High Oct 23 ‘24 and the bull trigger 
• RES 3: $34.590 - High Mar 28 
• RES 2: $33.117 - 76.4% retracement of the Mar 28 - Apr 7 bear leg  
• RES 1: $32.313 - High Appr 7                                      
• PRICE: $32.064 @ 08:04 BST Apr 14
• SUP 1: $30.57728.351 - Low Apr 10 / 7 and the bear trigger                
• SUP 2: $27.686 - Low Sep 6 ‘24 
• SUP 3: $27.180 - Low Aug 14 ‘24   
• SUP 4: $26.451 - Low Aug 8 ‘24 and a key support   

Silver is holding on to last week’s gains. For now, the recent move higher appears corrective. The metal on Apr 7, traded through support at $28.748, the Dec 19 low. A clear break of this level would signal scope for a continued sell-off, towards $27.686, the Sep 6 ‘24 low. On the upside, resistance to watch is $32.208 the 50-day EMA. It has been pierced, a clear break of it would alter the picture and highlight a stronger reversal.

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