Silver Prices Bouncing, Testing First Line of Resistance
- Silver prices undergoing relief bounce
- Already facing first line of resistance
- Watching price action upon tests of levels, looking for 15.64 at some point
See what’s driving precious metals in our quarterly forecast.
From our last update on silver prices: “When will the rout end? At this time, it’s looking like the next spot of potential interest won’t arrive until the December low at 15.64.”
As expressed on Wednesday, selling into the down-move without first seeing a recovery bounce (preferably into resistance) didn’t hold the best risk/reward. We’re now seeing a small bounce unfold, with the first level of resistance, the broken January 2016 trend-line, currently under a retest. Depending on how price action plays out around this line, it could be as it good as it gets for silver before we see lower prices carved out. Ideally, a rejection day (i.e. – key reversal bar, ‘pin’ bar) develops either around the trend-line at hand, or at one of the other points of resistance further up. If the Jan trend-line doesn’t spark selling interest, the next spot to watch for stalling price action is at the March low around 16.84. Beyond there, the July trend-line could become a factor, but it’s quickly losing its influence, and as we said the other it may need to be all-together removed from the chart. With an aggressive recovery, the January trend-line could come into play; at this time, this looks like the less likely scenario. A break below this week’s low of 16.07 should finally lead to the December low at 15.64.
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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.