Silver futures firmed in Wednesday's trading session on a weaker dollar and overall rebound in the precious metals complex. After briefly dropping below $30 per ounce again this week, speculative buyers appear to be buying this long term support level in anticipation of a move higher.
The sharp sell-offs have found quick retracements higher to form a volatile but well contained trading range between $28.50 and $31.50 per ounce. This price action has developed into a Falling Wedge chart pattern, shown here on the 240 minute time frame. This Falling Wedge scores high on internal readings and has very clear potential breakout levels from the current settlement price.
The momentum from the swing low at $28,50 appears favorable for a continuation of the rally to the resistance just below $31.00 per ounce, with a possible move above that level to initiate the breakout, A failure at this level would prolong the development of the pattern and increase the chance of a retracement back to the support provided by the wedge.
Given the current momentum, volatility, and proximity to the top of the range, a break to the high side may find plenty of support to carry the market back to the mid-30's in the near term.
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