Silver Under Heavy Pressure Ahead of US ISM Data

US Economic Strength StallingThe silver market has come under heavy selling pressure over the last week. Following the recovery across the back half of August, a rebound in USD has weighed heavily on silver prices. Concerns over the US economy have reared their head in recent weeks against a backdrop of several key data points undershooting forecasts. While the US is still forecast to avoid a recession this year, activity looks to be slowing and, as such, the Fed is no longer expected to hike rates.  While the shift in Fed expectations should be supportive for silver, concerns over a flagging economy are driving a wave of safe haven demand into USD currently.China ConcernsAlongside US economic concerns, fears over the health of the Chinese economy are also taking a toll. The recent downtrend in Chinese data has fuelled a wave of concern and has prompted a string of measures from Chinese authorities. However, with a sweeping fiscal package yet to be announced, the impact has been limited. With the demand outlook falling as a result, silver prices look likely to continue lower near-term for now.ISM Services NextLooking ahead today the US ISM services reading will be the next key data point to track. The reading is expected to have ticked lower from last month, while remaining in positive territory. If we see today’s data falling below expectations, especially if the reading slips back into negative territory, this will likely drive the safe-haven USD rally further, weighing on silver.Technical ViewsSilverThe recent rally in silver stalled out ahead of testing the July highs and price has since fallen back below the 24.0073 level. While below here, the focus is on a test of the bull channel lows next, ahead of structural support at the 22.3205 level. This is a key area for bulls to defend and, if broken, the path is open for a much deeper move down to 20.6398 next.