Looking at the chart, technically, Silver (CMP:16.10) has good support around 15.50-15.25 zone. Sustain below 15.25-15.00 area, it could fall to 14.45. Consecutive closing below 14.45, it may crash to 12.15 zone under worst bear market scenerio.
On the upside, sustain above 16.30, Silver could target 16.70-17.10 zone immediately. Consecutive closing above 16.70, it may target 17.45-18.45-20.25 to 21.45-21.55 zone in the short to mid term.
Bottom line (Positional Cyclical Trading Levels):
13.80-14.45-15-15.25-15.50-16.00-16.30-16.70-17.10-17.45-17.90-18.45
In the near term, continued chattering about strength/weakness of US Economy & FOMC rate hike probability or cyclical hawkish/dovish stances between different FED members will affect USD and in turn precious metals like Gold & Silver. Also there is Greek saga & some Geo-political news / events, which has cyclical safe heaven appeals between USD & Precious metals.
Going ahead, ECB/BOJ may prefer to continue print almost 24/7, China occasionally do some targeted mini stimulus and most probably FED will be fence sitter till 2015. It also appeared that over the times, the four pillars of global economy (FED/EU/BOJ/PBOC) are closely co-ordinating with each other by various ways in keeping the global financial market in control & stable, so that any knee jerk reaction like collapse of Lehman Brothers (2008) will not occur in future.
Most probably, Grexit will not happen (at least US will not let that happen simply for Geo-political factor Greece being an important strategic NATO member and Russia/China is ready to help/control Greece, if there is any real exit from EURO/NATO).
On the bright side, worst may be over for global economy & we may see substantial industrial recovery in the months ahead, which may increase demand of metals like Copper & also Silver and Gold to some extent. Continued devaluation of real currency may keep the safe heaven & real/hard asset appeal of Gold & Silver and never ending physical demands from different central banks & South Asian communities may keep the appeal for Gold & Silver intact.
Another factor is that, next year US will go for election and FED may prefer to wait till election to keep its dovish/neutral/not so much hawkish stance (max 0.25% rate hike). No Govt will like to face general election in the back drop of an unstable (crashed) financial market as a result of excessive FED hawkishness. In fact, FED may plan some Chinese type targeted mini stimulus for Real Street keeping stable the Wall Street in the days ahead of US election.
Also, there is always some concern in the mind of FED for China slow down, EU recession, Grexit etc and they will be in no hurry to hike rate in the near future. Primary caveats of FED for rate hike/normalization policy rate (Inflation>2%, Unemployment<5%,) along with other conditions like substantial wage & GDP growth for the real economy may not converge at the same time in the near future until 2015-16.
Its a fact that without any real rate hike/FED action, USD is showing significant strength, which may be also equivalent to rate hike to some extent. Also for significant USD strength, some US Corporates/part of US economy is already suffering. FED can't tell the world in a clear tone that they are not in a position for rate hike in the immediate future. But, their mere talks (cyclical in nature) about US economy is more than enough for significant USD movement on both sides. If mere talks are controlling real USD movement, who cares for real FED action ? Probably, its going to be another "Buy the rumour & Sell the news".
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