Silver Prices Technical Analysis: In a Holding Pattern
- Silver prices moving sideways, but bearish sequence on short-term chart could develop
- Sharp reversal last week at resistance still suggests weakness to lie ahead
- Waiting for further developments and UK vote results
On Tuesday, the last time we discussed silver we noted it price action as bearish given it was rolling over beneath a rising parallel of importance. It sold off, and for a moment it broke the swing low created at 17.13 on 6/16, but has since recovered a bit to where silver was trading two days ago.
The spike high and reversal on 6/16 into a confluence of overhead resistance still leaves us in the bear-camp, but we will need to see short-term price action continue to back up our bias.
If silver turns lower from around here or a short distance above, then a lower high, descending wedge sequence will be under development.
The trigger for a short if the series of lower highs continues will be a clean break below 17.13/08 support on a 1 to 4-hr closing bar basis.
If silver fails to break below support, then at some point we will need to consider bullish alternatives, but with longer-term resistance looming up to 18 we are hesitant to turn too friendly towards the metal at this time.
Silver 2-hr [Daily]
Today is the big day in the UK, throughout it voting will take place to decide on whether Britain leaves the EU or not, tomorrow we will get the final results. The FTSE and pound are suggesting a favorable outcome for the ‘remain’ camp, but risk will remain high until we know for sure. While precious metals aren’t at the epicenter, they certainly will be impacted, especially if markets are shocked with a ‘leave’ result.
With that said, we’ll reserve ourselves until next week. But, should silver play out in a manner similar to as just described, we’ll be ready to take action.
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---Written by Paul Robinson, Market Analyst
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.