Technical Analysis – Silver’s rebound in question as positive momentum fades

Although silver has been giving up ground since early May, the precious metal has recently demonstrated promising signs for a rebound. Following a bullish cross above its 50-day simple moving average (SMA), the price is currently trading above the Ichimoku cloud. However, the recovery might come short as the immediate bias is turning bearish.

The short-term oscillators further reinforce the loss of momentum for the metal. The RSI is pointing down in the positive region, while the stochastics have posted a bearish cross in the overbought area.

Should the positive bias evaporate and the price moves downwards, the bears may target the 23.00 level. A drop below this support would open the way towards the 22.00 region, which rejected price declines both in September and October. Failing to find support at the aforementioned level, the next barrier might be the 3-month low of 21.40.

On the flipside, if buying pressure intensifies, buyers might meet immediate resistance at the 24.85 region that has held strong both in August and October. Should the price continue its ascent, the next hurdle could be found at 25.60. Failing to reverse there, the price might move towards the 26.60 level or even higher to 27.10, which might then halt the rally.

To sum up, silver seems to be lacking the necessary momentum to bounce back from its recent medium-trend downtrend. However, a clear move above 25.60 would alter its short-term picture to positive and revive the bulls’ hopes.

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