Technical Analysis – Silver tests a make-or-break point



Silver’s long-term neutral outlook is at risk of a downgrade as the bears keep challenging the floor around 21.40 despite yesterday’s poor upturn.

The RSI and the Stochastics reflect oversold conditions, though neither of those indicators seem determined to change direction to the upside. Therefore, the base scenario is for sellers to dominate in the short term, although the case for a rebound will remain on the cards.

A close lower may initiate a sharper decline towards 20.20, where the key 200-weekly simple moving average (SMA) is positioned. The 19.50 level, which blocked the 2019 rally and delayed bullish corrections in mid-2020, may next attempt to save the market from further depreciation. However, if it proves fragile too, the sell-off could exacerbate to 18.70.

The way higher could be a tough one, as several obstacles may ruin any progress. The area around 22.00 will come first into view, whilst the constraining red Tenkan-sen line could add more pressure, preventing an acceleration to May’s resistance of 23.00. Further up, the 200-day simple moving average (SMA) currently at 23.65 could gain exclusive attention.

Overall, silver looks to be trading at a make-or-break point. A clear bounce above 21.40 would allow for more improvement, whereas a decisive close below it could push a group of traders out of the market.

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

We are using cookies to give you the best experience on our website. Read more or change your cookie settings.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.