Silver Price Analysis: Pulling back within a probable downtrend
|- Silver is correcting within a short-term downtrend.
- A break below the June 13 lows would probably lead to a continuation of the trend of lower lows.
- The 50-day Simple Moving Average is an obstacle to bears pushing price lower.
Silver (XAG/USD) trades a third of a percent lower in the $29.40s on Monday. Despite trading marginally lower on the day it has overall recovered since falling to a low of $28.66 on June 13.
The precious metal is in a short-term downtrend, on balance, and given “the trend is your friend” this is likely to continue. The recovery since June 13 is probably a pull back rather than a reversal – once it finishes the downtrend will probably resume.
Silver 4-hour Chart
A break below $28.66 (June 13 low) would confirm another lower low, and a continuation of the bearish sequence.
After that, Silver could fall to an initial, conservative target at $28.06, the 0.618 Fibonacci ratio of the height of the range that unfolded in the second half of May, extrapolated lower.
The 50-day Simple Moving Average (SMA) at $29.01 could act as an obstacle to progress lower.
Even more bearishness could see Silver reach as low as $27.02 (100% extrapolation of the height of the range lower).
It would require a close above $30.50 to bring the short-term downtrend into doubt. A move above the $31.55 lower high would suggest the possibility of a recovery to the range high at $32.51, and a reversal of the short-term trend.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.