Silver Eyes Key Resistance- Weakness to Be Viewed as Opportunity
- Silver rally at risk near-term, broader outlook remains constructive
- Updated targets & invalidation levels
- Looking for more trade ideas? Review DailyFX’s 2017 Trading Guides. Join Michael for Live Weekly Trading Webinars on Mondays at 13:30GMT (8:30ET)
Technical Outlook: Silver prices are responding to a key resistance confluence at 17.74/86- this region is defined by the 38.2% retracement of the July decline & the 200-day moving average and converges on a pair of slope lines extending off the 2016 highs. Although the broader outlook remains constructive, the immediate advance is at risk below this threshold with support seen at the median-line extending off the November low / 100DMA around ~17.15/29. A breach above this critical zone would likely see accelerated gains for the precious metal with such a scenario targeting confluence Fibonacci resistance at 18.33/39.
Notes: Prices have been trading within the confines of an ascending pitchfork formation extending off the December lows with silver struggling to mount the 50-line this week. Note that we’ve been marking ongoing divergence in momentum on this advance and further highlights the near-term risk for a pullback in price.
Interim support rests with the weekly / monthly opens at 17.49/53 backed closely by the median-line / 23.6% retracement at 17.33. A break below this level would suggest a larger correction is underway targeting the weekly range lows at 17.03 & the lower parallel. Bottom line: the immediate threat is lower but ultimately weakness into the lower parallels should be viewed as a buying opportunity.
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---Written by Michael Boutros, Currency Strategist with DailyFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.