Silver Breakout Holds Ahead of Fed

US Manufacturing Bouncing BackYesterday saw a slew of PMI data sets out of the eurozone, UK and finally the US. The overriding tone to the day of data was negative, headlined by heavy misses on some eurozone and UK PMIs. However, US data was seen bucking the trend with the manufacturing PMI coming in above expectations. Though still in contractionary territory at 49. The data was above the 46.3 recorded over the prior month and firmly above the 46 the market was looking for. With much focus on recession risks currently, this latest US data is perhaps reassuring traders that the economy is not yet headed for the ground, given the rebound we’re seeing in manufacturing.Fed in FocusTraders are now waiting on the Fed tomorrow to see whether a further hike is seen and how it lays out the next set of guidance. The broad expectation is for a further .25% hike accompanied by a signal that rates will likely remain on pause then going forward. However, some players are noting an outside chance that the Fed pauses again this month given the steady fall we’re seeing in inflation. In both scenarios, a weaker US Dollar looks likely to be the outcome. The main upside risk for USD is if the Fed strikes a more hawkish tone, keeping the door open for further tightening. In this scenario, USD would be firmly bid while markets such as silver would be firmly sold.Technical ViewsSilverThe rally in silver prices saw the market breaking out above the 24.0073 level. The move has stalled for now though, while above the level, the focus remains on further upside with 26.0974 the next upside level to note. To the downside, any break of current support will turn focus to 22.3205 next and the bull channel lows.