- Silver prices holding below resistance
- As long as silver stays below big picture resistance no reason to turn bullish…
- While a break below short-term support opens door up for a move towards 16
Precious metals remain weak while the US dollar holds strong. Silver prices have meandered in recent trade, an expectation we had given how sharp the drop was from over 20. The period of digestion below resistance sets the metal up for another move lower, but the timing could be tricky.
But as long as silver stays below resistance (~17.80s) there is little reason to believe it is headed anywhere but sideways at the least and likely lower at some point sooner rather than later.
Last week we pointed out a triangle forming on the hourly chart, but choppy trading conditions have misconfigured the pattern a bit. Nevertheless, the lack of buyers showing up at current levels is indicative of a heavy market. A ‘dead cat bounce’.
A daily close above 17.82, and really above 18 (to clear above triple confluence of resistance) is needed to turn our bearish bias cautious. We will need to see how that would unfold first before drawing any concrete conclusions.
As long as resistance holds, a break below the 10/7 low at 17.12 will open the door up for losses towards the 16 area. There is nothing substantial to the left in terms of price support until then.
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---Written by Paul Robinson, Market Analyst
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