Silver Price Analysis: Correcting back within an uptrend
- Silver price is correcting back after rallying during May.
- The correction is likely to run out of steam eventually and the uptrend to resume.
- Support at $27.51 may provide the staging post for a bullish revival.
Silver (XAG/USD) price is correcting back after the strong rally in May became overbought and bullish traders unwound their longs.
Despite the correction, the short-term trend for Silver remains bullish and given the old adage that “the trend is your friend,” it is expected to resume and push higher once the pull back ends.
4-hour Chart
There are no signs yet that the correction has ended – though downside momentum is slowing – and it is possible Silver could continue falling.
The next major support level that may act as a barrier to further losses is at the former April 26 highs at $27.51. A reversal at that level could signal the resumption of the dominant uptrend.
A break above the May 10 high at $28.77 would indicate the formation of a higher high and suggest extension.
Beyond that there is the possibility of a retest of the $30.00 long-term range highs.
Author
Joaquin Monfort
FXStreet
Joaquin Monfort is a financial writer and analyst with over 10 years experience writing about financial markets and alt data. He holds a degree in Anthropology from London University and a Diploma in Technical analysis.
