Silver Prices: Battle at Multi-Month Level
- Silver prices trading in key resistance zone extending back to June
- Higher high from December could become rather significant
- Trading outlook based on current situation for both longs and shorts
On Monday, we described this week as being a pivotal one for not only silver prices, but for gold and the US dollar (DXY) as well. So far, that is proving to be the case with gold now firmly above 1200 and DXY forcefully challenging key support. Yesterday, silver had its highest close in over two months, creating a higher high from December (on a closing basis), but it still needs to push through the 12/7 intra-day high of 17.24 to fully clear resistance around the 17.20 line and fully validate the higher-high scenario.
A higher high would be considered a fairly significant event, given it would be the first one since peaking back in July; a larger break in trend could be underway. On a firm push above resistance running back to June we will look to the trend-line running lower from a swing high created in August; the line runs in the area of 17.70/75.
With gold continuing to advance above 1200 and the US dollar looking fragile, silver looks poised to continue higher. However, buying into resistance, as always stated here, doesn’t hold the best prospects for success over the long-run. But if silver can clear those pesky lower 17s, it could be ‘game-on’ to the upside. Traders looking to short, now is the time for price action to turn bearish – whether it be a sharp turn lower or a key reversal bar on a failed breakout above resistance. This would be the first true indication of a break in the upward momentum since bottoming in late-December.
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---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.