Silver Sliding Sharply from a Double Top

on September 12 2012 1:36 PM

Silver Technical Update

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XAG/USD (Silver) 1H Chart 9/12/2012 10:55AM EDT

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Silver, which has been rising sharply on the back of expectations of the Fed moving to implement QE3, fell sharply a day before the FOMC meeting, which will be on Thursday (9/13), 2:00PM EDT (18:00GMT). As seen in the 1H chart, silver has completed a double top and fell to the 200-hour SMA before finding some support around 32.45.

The RSI dipping to 30 suggests the momentum has turned sideways, and maybe slightly bearish in the near-term. If there is a pullback that holds silver under 33.50, preferably even below the 33.23 pivot, then the market would have put in a top in the short-term. This scenario would be accompanied by the RSI holding under 60 after a pullback.

Looking at the 4H chart, we see the next support pivots. 31.87-32.00 reflects a brief consolidation support area. Below 31.85, and with RSI 4H reading under 40, we have a more bearish outlook. 31.24 is the next pivot, but really that would expose the 30.00 handle.

XAG/USD (Silver) 4H Chart 9/12/2012 11:15PM EDT

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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.

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