Silver Prices: Treading Below Resistance, Hourly Chart in Focus
- Silver spiked on safe haven flows
- Currently below resistance zone of ~17.80 to 18
- Hourly chart in focus
Last Thursday, we made note of a potentially bearish short-term pattern developing, but with the ‘Brexit’ vote upon us, though, we decided it to be most prudent if we headed for the sidelines. This turned out to be a good choice, with sharp risk aversion leading to precious metals spiking hard on safe haven flows.
The shot higher took silver above the 18 level we were keying in on as resistance, but not long after trading above sellers quickly stepped in forcing it back down to close out beneath the resistance zone in the 17.80 to 18 range.
Daily charts are largely mangled across all asset classes and in need of some time to ‘fix’. Silver is no different. New levels will be forged out and a clearer bias will eventually present itself. Until then, it looks as though we will just have to be patient and wait for clarity before putting on any risk beyond a day. Day-traders can still find opportunities trading off short-term levels and following momentum, but the swing-trader is best served on the side-lines for now.
In the very short-term, silver is seeing action around the 17.60/62 level as support. A series of short-term lower highs is developing beneath the earlier noted resistance zone between 17.80 and 18. The price sequence of lower highs and flat bottom support is taking the shape of a descending wedge. A clean break below 17.60 would confirm the hourly bias towards lower prices. A move above the top-side trend-line doesn’t warrant much of a bullish stance with resistance so close at hand.
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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.