Silver might have carved a meaningful top at $27.88 levels on May 10, 2021. The metal has since reversed lower and managed to drop through $26.70 lows recently. Intraday/short-term resistance is seen around $27.30/40 levels and bears might be inclined to take control back if prices manage to reach there.
A break below $26.70 will also breach its counter trend line support since March 31, 2021 and proceed towards $25.70 mark. It would confirm a potential trend reversal and that bears are back in control. The downside targets remain $19.00 and $13.00 levels respectively.
The counter trend rally between $23.80 and $27.80 can be seen as a combination W-X-Y, which rallied through the fibonacci 0.618 retracement of entire drop between $30.13 and $23.80 levels respectively. High probability remains for a bearish turn from here.
Earlier, Silver had topped around $30.13 levels and reversed lower through $23.80, clearly sub dividing into 5 waves. The drop can be taken as a Leading Diagonal pattern, which is marked as a larger degree Wave (1) on the chart here.
Structurally, a corrective wave also looks to be complete towards $27.80 mark. A 5-3 structure invites for another 5 wave move towards the larger trend, which is down in this case. If correct, Silver is poised to turn lower and remain in control of bears for the next several weeks.
Only a sustained break above $29.00 would threaten the above bearish view in the metal. Watch out for a break below the trend line support for the drop to accelerate further.
Finacademy Technical Team
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 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 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.