Silver bounces off a key, long-term resistance
|It had been doing really well since the beginning of September but it’s looking like silver’s rise has stopped, and stopped for good.
Silver’s recent strength was technically displayed with a beautiful inverse Head and Shoulders pattern (grey), which over the last week led to a breakout of this formation’s neckline (blue). Unluckily for buyers, close to the neckline was a crucial, long-term resistance (22.2 USD/oz orange), which had served as a key support between July 2020 to May 2022.
Contact with that resistance was enough for buyers to back off and for sellers to join the party. The price reversed and did so quite rapidly, breaking below the neckline. That created a false breakout pattern (yellow) and was a direct signal to sell.
Taking all this into consideration, the current sentiment on silver is negative, and over the next few days, we’ll most probably see the price drop even lower.
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