- Silver prices break above mid-range resistance, tilting chart higher
- At the moment, no sound trade set-ups to speak of within the range
- Silver will need to move to either side of the range and reverse for a good risk/reward opportunity
In Tuesday’s commentary, it was noted that as long as silver remained contained below resistance in the 19.93/20.03 region the metal was still on path to the anticipated target of 19.20 (the low-end of the month+ long range). However, instead of working towards another lower low, a higher low was created and silver well exceeded the resistance zone.
For now, this takes the notion of seeing 19.20 off the table and the focus shifts back towards the high-end of the range in the 20.66 to 20.76 vicinity. This by no means is an ‘all clear to get long’ signal from right here, just that the risk has become skewed higher at the moment.
The current range environment and the positioning of silver – somewhere in the middle of the range – makes trying to determine direction with any real certainty, difficult. The best way to trade this type of environment, is to look to sell when price rolls over from resistance and buy when price turns higher from support.
Scalpers can look to play off minor levels of support and resistance within the range, but need to be nimble as price action is likely to remain indecisive.
For now, silver is neither here nor there in terms of good levels to react off of. Again, if silver can continue to push higher into resistance and then roll over as it did back in the first couple of days of August, a short opportunity could present itself.
Conversely, should silver drop down towards the 19.20 level, then we will watch for signs of a reversal to the upside.
It will require a sound break and retest of either side of the range before we would consider taking a continuation-style breakout trade.
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX.
You can email him at firstname.lastname@example.org with questions or comments.