What’s inside:
- Silver sitting above the July trend-line, struggling to gain momentum with USD strength
- Bottoming formation still in play as long as it doesn’t break key downside levels
- Bottom and top-side levels in focus
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On Tuesday, we said we were looking for silver to create separation from the July trend-line given it had just slightly edged above it at that time. It continues to try and make further head-way beyond trend-line resistance (now support), but is struggling to gather momentum with the US dollar gaining strength.
The inverse H&S formation we’ve been discussing will remain in play as long as silver doesn’t crack down below the July trend-line and head sharply below the neckline and support in the low 17s. It would really take a lower low below the 1/27 low at 16.64 to take the H&S completely off the table.
For now, we will look for silver to maintain above the July trend-line and continue to try and push higher. On Wednesday, silver stopped just shy of the 200-day MA at 17.87. It is viewed on this end as only minor resistance, and if silver is to make good on its bottoming formation then it should trade above it soon.
Further strength will bring into play the top-side parallel from the trend-line running up from the December low, but is also viewed as minor resistance. The area surrounding 18.50, however, could present problematic. A swing low was created around there back in August, and during November it made several strong pushes above but was unable to sustain, with most of the daily closes falling right around 18.50. The eventual target is the November high at 19, which also aligns with the measured move target determined by the depth of the inverse H&S pattern.
Silver: Daily
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---Written by Paul Robinson, Market Analyst
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