Silver Technical Analysis: On Reversal Watch from Support
Silver Technical Outlook:
- Silver trading sharply lower past few sessions has support in focus
- March low, 200-day MA, and backside of trend-line in confluence
Silver has been volatile lately, but with no real direction. The decline this week is bringing into play a very important area of support that could spark a reversal trade. It may be a short-lived run back higher but nevertheless the volatility makes for an interesting opportunity.
Right around 24 is the March low (24.05), the 200-day MA (23.96) and then the trend-line running down off the 2021 high (~24). This makes for a very big spot to look for silver to reverse from. We are seeing some strength off the vicinity now, but a more thorough test and reverse could make for the best set-up.
A small run through support on an intra-day basis with a close back above could set up the upside for a decent bounce at the least, perhaps more. With volatility high it is possible that a run back over 26 could develop as a broader range develops.
In the event we see a daily close below 23.96 a larger sell-off could be in the works. There is a trend-line running higher from the March 2020 low that could provide some support in the event the 23.96 level fails. Beyond there things could get a lot uglier with no meaningful price levels until around 22.
For now, the play looks like to wait and see if support can be tested and hold, and if it does then would-be longs may look for silver to recover this week’s hard sell-off.
Silver Futures (SI!) Daily Chart
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.