Talking Points

Silver Daily

Silver Daily Chart

Technical Outlook:Silver prices have continued to trade within the confines of an impressive, well-defined ascending pitchfork formation extending off the November / December lows. The precious metal failed to hold above key resistance this week on building bearish divergence at 18.33/37 – a region defined by the 50% retracement of the July decline & the 100% extension of the ascent off the December lows. The pullback is now testing a key near-term support just below the 18-handle where the 200-day moving average converges on the 50-line of the ascending slope formation.

Silver 240min

Silver 240min Chart

Notes: A closer look at price action highlights this near-term slope convergence and heading into the close of Europe the risk remains for a near-term rebound off this mark. That said, the broader focus remains weighted to the topside while above 17.51 with a breach / close above 18.37 needed to validate resumption of the uptrend. Subsequent topside objectives are eyed at 18.58, the 50-line (currently ~18.80) & the 61.8% retracement at 19.03.

Silver Prices Slide Lower- Support Targets View
  • A summary of IG Client Sentiment shows traders are net-long Silver- the ratio stands at +4.78 (82.7% of traders are long)- bearish reading
  • Long positions are 0.5% lower than yesterday but 0.8% higher from last week
  • Short positions are 7.5% lower than yesterday and 17.9% lower from last week
  • Broader sentiment continues to point lower with the recent drawdown in short-positioning further highlighting the short-bias. From a trading standpoint, silver prices are approaching support & while our focus is lower, I’d be looking for a near-term rebound before attempting entry.

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Other Setups in Play:

- Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex contact him at mboutros@dailyfx.com or Click Here to be added to his email distribution list.