Hello traders! The silver has experienced a very strong uptrend and the price has risen from $11 to $29 in 5 months, resulting in a 156% growth. Indeed this was a strong rally, but perhaps now it is the time for a correctional move to the downside, before/if the uptrend continues.
There are few indications that price might be heading south. First is the break below the uptrend trendline, after which price moved up and rejected 23.6% Fibonacci retracement level at $28.22. There was a spike produced about Fibonacci resistance, reaching $28.46 high. As long as the price remains below $28.46, XAG/USD will continue the correctional move down.
Today price has again broken below the uptrend trendline, although rejected 50 Simple Moving Average. This might result in a short term consolidation phase, at least until the price will either break above $28.46, or below $26.49. If Silver will break to the downside, price is likely to reach 61.8% Fibonacci retracement level at $22.38, where previously price formed the support and rejected the 50 SMA.
In regards to the upside, break and close above the $28.46 resistance, should result in the continuation of the uptrend, at least towards the $30 psychological resistance, but potentially much higher than that.
Bias: Strongly bearish while below $28.46
Potential Resistance Zone: $27.50 – 28.00
Potential Targets: $22.40
Have a profitable trading!