Silver Prices Stall at Resistance
- Silver Prices Test Critical Resistance at $20.03
- A Reject Here Suggests Silver Prices are Trading in a Descending Channel
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The price of Silver (Ticker: XAG/USD) is trading lower this morning, after being rejected at a daily line of resistance at $20.03. This line is represented in the graph below as a 78.6% retracement value, and is measuring the distance between the August 10th high of $20.46 and the August 29th swing low of $18.36. Traders will be watching this value to see if Silver prices continue to rally, or are rejected into an alternative trading pattern.
One possibility, suggests that that Silver prices may be simply consolidating before breaking out higher. In this scenario, traders may continue to look to buy Silver above resistance of $20.03. A bullish breakout would continue the commodities uptrend for the month of September, and open silver prices to test the previously mentioned daily swing high of $20.46.
Silver Prices Daily Chart & Channel
(Created by Walker England)
Alternatively if Silver prices are rejected at resistance, it may suggest that the commodity is trading in a descending price channel. This channel has been formed by connecting the August 2nd high of $20.76 to yesterday’s swing high of $20.10 with a descending trendline. This line has then been duplicated to connect a series of daily swing lows to complete the pattern. If this pricing pattern holds, technically it suggests that Silver prices may decline to new lows under $18.39.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.