Silver Prices Technical Analysis: Choppy Conditions Continue Following Spike High
- Silver price action choppy as expected
- Prolonged period of consolidation, pullback needed if silver is to sustain further gains
- Buy and sell zones highlighted
Since the last time we discussed silver it has acted relatively in line with expectations given the nature of the late June, early July moonshot. That is, silver has since been choppy as it digests the move higher.
Another push higher is certainly in the cards, but given the spike and reversal day seen early last week the metal could use an extended period of consolidation or pulling back to reload if it is to continue the trend higher in a sustainable fashion. A push back towards the spike high would be viewed cautiously at this time, though, as risk of failure looks high on a retest or slight new high without a prolonged period of consolidation.
A decline back towards the 19.20/19 area and hold of support could present another shot at buying with overbought conditions alleviated. Silver prices could even sink to around the mid-18s and still be viewed constructively as the old 2013 and 2014 swing lows, 2015 swing high come into play as old resistance turns new support; and the broader trend off the December lows will still maintain its structure of higher highs and higher lows.
In any event, what we will be watching for – whether it is a push to the old high or a decline into support – is price action validating either the spike high as a serious level of resistance, or confirming lower levels as support. How the market responds once it has moved to either end of the before mentioned spectrum is what matters. In the very short-term, silver has support on the intra-day charts at 20.09 and resistance around 20.65.
Silver (XAGUSD) Daily [2-hr]
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX. You can email Paul at probinson@fxcm.
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