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.
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.
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