Technical Sentiment: Neutral
Key Takeaways
Silver rallied 49 cents on Wednesday, providing a late continuation on Monday’s Bullish Engulfing Bar. Having briefly crossed above the 200 Simple Moving Average on the 4H time frame and with a Higher Low ($19.04) and a Higher High ($19.97) already established, the market shook a few traders out of their short positions as technical signals were heavily skewed towards the upside.
Technical Analysis
Yesterday’s gains have been completely retraced as Silver is currently trading around $19.50. The $19.97 rally above the previous highs from late-April and May cleared stop losses from short traders. At the same time this move indicated an overall bullish bias, thus Silver is technically less likely to aggressively pursue levels below $19.04 in the near future.
A deeper fall into the $19.00 – $19.33 region can suggest the bullish rallies we’ve seen this week have reached their target. However, as long as the $19.04 Low remains intact, the net positioning will be skewed towards long positions and buy orders as traders will attempt to catch another possible Higher Low.
Towards the upside $20.00 will remain the most important resistance to be broken before the downtrend is completely invalidated. A secondary major resistance lies at $20.59 in the form of a pivot zone, with the 200-Day Moving Average just above it at $20.85.
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Prepared by Alexandru Z., Chief Currency Strategist at Capital Trust Markets