Silver moved higher after finding support at 19.55 (S1)

The dollar traded unchanged against all but one of its G10 counterparts during the European morning Monday. The only currency that depreciated against the greenback was the yen.

The main event we had this morning was Eurozone’s preliminary CPI data for March. Eurozone’s inflation unexpectedly slowed to +0.5% yoy in March from +0.7% yoy in February, its lowest level since November 2009. Economists had estimated a +0.6% yoy rise in prices, which itself would have been worrisome for the region’s economy.

The unexpected slowdown raises expectations that the European Central Bank may have to take action on Thursday to bolster Euro-area’s economy. Nonetheless, the common currency was not hurt as we expected. EUR/USD declined about 25 pips at the release but recovered immediately back to its early morning levels.

The main winners among the EM currencies we track were HUF, RUB and TRY. The ruble strengthened as Russia and the US agreed on the need for a diplomatic solution concerning the tensions over Ukraine, while the Turkish lira hit a two-month high after Prime Minister Tayyip Erdogan’s party claimed victory in local elections.

Silver moved higher after finding support at 19.55 (S1).  I would expect the white metal to continue the upward wave and challenge the 20.20 (R1) resistance hurdle, where an upward violation may trigger extensions towards the next resistance bar at 20.55 (R2).

Meanwhile, the MACD lies above both its trigger and zero lines confirming the recent bullish momentum of the metal. On the longer time-frames the picture remains mildly negative, thus I would consider any further advance on the 1-hour chart as a correcting phase.