Following the steep increase in the price of silver in recent days, it appears that the precious metal may be due for a downward correction. Technical signals are indicating that bearish movement may be impending, which could bring prices down to the 34.50 level.
We will be analyzing the 8-hour silver chart, provided by Forexyard. The technical indicators being looked at are the Relative Strength Index, Stochastic Slow and Williams Percent Range.
1. The Relative Strength Index is currently at the 80 level, well in the overbought zone. This is typically a sign that a bearish move is likely to occur in the near future.
2. A bearish cross has formed on the Slow Stochastic, indicating a downward correction may take place.
3. Finally, the Williams Percent Range remains well in overbought territory. This can be taken as a sign that the price of silver is likely to drop, giving traders an excellent opportunity to open sell positions for a potentially significant profit.
