Technical Update for Silver
Silver 1H chart 9:10PM EDT 10/18/2012
Flag breakout: Silver consolidated after falling to about 32.50 Monday (10/15). It traded in a slightly rising flag pattern until the approaching previous resistance area near 33.30. It has since fallen below the flag pattern, signaling bearish continuation. The RSI also reflects a bearish momentum developing as it dipped below 30, failed to push back above 60 and again kissed 30. The moving averages in the 1H chart are also in bearish alignment – with 200 above 100 above 55 above 21 above 8 SMAs.
Projections/possible support factors: The bearish continuation outlook extends the completion of a double top seen in the daily chart. The 38.2% retracement of the 26.11 to 35.10 rally since July is 31.70, and could be a target for the bearish scenario in the short-term if it does materialize fall under 32.50. A conventional double top breakout target is 31.50. Then there is the 50% retracement at 30.63, which lines up with the 200-Day SMA, both reflecting the “mean” price action as silver has been consolidating since the 2011 high at 49.78 in April.
Silver Daily chart 9:15PM EDT 10/18/2012
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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