Silver Technical Update

XAG/USD (Silver) Weekly Chart 7/2/2012 9:55AM EDT


If we start at the weekly chart, we see that silver is testing a support pivot near 26.10 for the 4th time. The last 3 were during Jan. 2010, Sept. 2011, Dec. 2011, and May 2012. During Sept/Dec. 2011, the tests of this support were followed by a rally above 36.50. But will be get a similar bounce this time?

The dynamic has changed. The Weekly RSI fell below 40, and reflects a significant loss of bullish momentum. Maybe do get a bounce from 26.10, but we should watch out for the declining channel development and limit our bullish outlook to the channel resistance.

This week, we might even want to limit the bullish outlook to the 29.00 handle. A break above the 30.00 level however, puts away the bearish scenario, and exposes the channel resistance which would probably end to be in the 33.00-33.50 area.

Also note that if the daily RSI pops up above 60, we can say that the market is not developing persistent bearish trend for the bearish continuation to break the 26-26.10 support area.

XAG/USD (Silver) Daily Chart 7/2/2012 10:05AM EDT



Fan Yang CMT is a trader, analyst, educator and the Chief Technical Strategist FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.