Silver approached major resistance zone around $27.50/60

Written by Finacademy.io

May 7, 2021

Technical Analysis:

Silver has raised through $27.55 levels this morning, alongside most risk assets. The metal has approached a strong resistance zone now and bears might be inclined to take control back soon. Also note that it has almost reached the fibonacci 0.618 retracement of the entire drop between $30.13 and $23.80 levels respectively.

Silver had dropped from $30.13 levels, sub dividing into 5 waves marking a motive wave. The pattern unfolded is a leading diagonal, which terminated around $23.80 mark. The subsequent rally towards $27.55 is just a counter trend, which might be complete.

Looking at the wave structure, Silver has now terminated higher degree Waves (1) and (2) around $23.80 and $27.55 levels respectively. Please note Wave (2) might test $27.60/70 zone before terminating and turning lower again.

If the above structure holds well, Silver might resume lower towards $19.00 and $13.00 levels as Wave (3) begins to unfold. A break below $26.30 from here will confirm a meaningful top is in place and that bears are back in control.

Also note that a potential Head and Shoulder reversal pattern has been unfolding since $23.80 lows. The metal has carved a right shoulder around $27.55 or is very close to termination. If the above is correct, Silver might be heading lower from here soon.

Traders might be preparing to initiate fresh short positions around $27.50/60 levels with a potential target below $19.00 levels at least. Watch out for a bearish reversal from current levels soon.

Prepared by

Finacademy Technical Team

Related Articles

EURUSD progressing in Wave (3) lower towards 1.1300 levels

EURUSD progressing in Wave (3) lower towards 1.1300 levels

EURUSD has finally reversed lower from 1.2218 highs last week, after having drifted sideways for a while. The drop was much anticipated as bears have managed to take out over 300 pips since last Wednesday. They remain poised to target below 1.1700 in the near term.

US Dollar Index preparing to push higher towards 95.00/96.00

US Dollar Index preparing to push higher towards 95.00/96.00

US Dollar Index has raised through 92.00 levels as of now and bulls are looking poised to extend further through 95.00, 96.00 levels in the next few weeks. It is quite possible that they continue higher from here itself or after a pullback, but prices stay above 89.60 levels.

USDJPY prepares to push through 111.20 levels

USDJPY prepares to push through 111.20 levels

USDJPY breaks higher towards 110.80 levels yesterday as the technical direction was clear and discussed here. At times market awaits a trigger to push through its determined trend; it was the Fed interest rate yesterday that provided the same.

en_US