Silver Price Action Looks Corrective; Resistance Right Here, Right Now
- Silver prices short-term uptrend looks corrective
- Upper parallel front and center, levels outlined
- Watch gold for clues as it approaches major resistance
Silver prices remain in a short-term uptrend after carving out a low on 12/20, but the move higher looks corrective in nature given the weak to moderate momentum we’ve seen so far and the fact it’s occurring within the context of a strong downward trend in place since July. The bounce could carry up into the low 17s before the sequence of lower highs and lower lows comes into question.
But at the moment we are interested in seeing if silver can turn lower right here, right now from around the 16.60/70 area where there is an upper parallel; this line is attached to a bottom-side trend-line which ran from October under the November and December lows. Given the lower parallel’s influence as support, the upper parallel could act as a significant barrier for silver – we’re about to find out.
A turn lower from here would expose minor support in the 16.10/20 vicinity and quickly put the area beneath 16 into focus. A drop below 16 likely means the next leg lower is well underway and a move towards sub-15 is in the works.
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Keep an eye on gold as it approaches 1190/1200, an area we’ve been focused on as resistance. It’s not far away now, a move up into this key resistance zone and turn lower could act as a signal the bounce in the precious metal sector has run its course.
---Written by Paul Robinson, Market Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.