Silver Technical Analysis:
- Sizable resistance via a pair of trend-lines
- Multi-week trend is to the downside
- Short-term corrective pattern could trigger soon
Silver Technical Analysis – Postured for Another Leg Lower
Silver continues to sit in a precarious position as two lines of resistance intersect and look to keep a ceiling in for the time being. The lines in question are the underside trend-line from the March low, which most recently acted as resistance on March 11. The other trend-line runs off the Feb spike-high.
With the two lines in confluence the area right around 26.70 is makes for a meaningful spot to see a near-term high develop. Furthering the case for the downside is the generally negative trend and tone since the Feb 1 spike.
Looking closer the 4-hr time-frame, the price action off the most recent swing-low isn’t particularly inspiring as silver chops its way higher. The overall price action is developing a rising wedge situation with the top of the wedge arriving at confluent resistance.
Should the lower trend-line of the wedge pattern break and 25.73 to confirm, silver may quickly head for a new cycle low off the Feb high. A break below 24.83 would have the rising 200-day at 24.42 in play. Should silver fall to that point we will need to see how price behaves for further cues as to whether that support will hold or not.
To turn the picture more positive, silver will need to rise above both aforementioned trend-lines. This would require a move into the 27s. Should that happen then silver may try to reassert the longer-term trend higher.
Silver Daily Chart (confluent resistance)
Silver 4-hr Chart (wedge forming within bearish context)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
