Silver needs to break below $26.70 to confirm bearish reversal

Technical Analysis:

Silver has been drifting sideways since dropping through $27.35 lows recently. The metal seems to be carving a lower degree wave iv triangle structure, before a potential break lower towards $26.70 mark, going forward.

Looking at the larger degree wave structure since $30.13 highs in February 2021; Silver seems to have carved a leading diagonal labelled as Wave 1 on the chart here. The subsequent rally between $23.70 and $28.76 also looks complete, Wave 2 on the chart.

The counter trend rally has reversed from fibonacci 0.786 retracement of the entire drop between $30.13 and $23.70 levels respectively. If the above proposed structure holds well, Silver might unfold lower towards $19.00 levels as Wave 3 progresses.

Immediate support is seen at $26.75 while resistance comes around $30.13 levels respectively. We need to see a clear break below the counter trend line and subsequently below $26.75 support to confirm a bearish turn.

Traders might be prepared to initiate further short positions on a break below $26.75 mark. Silver continues to remain vulnerable for a huge bearish reversal until prices stay below $30.13 levels, going forward.

Prepared by

Finacademy Technical Team