Silver Hits Resistance Near a Downside Line and Slides
|Silver traded lower on Friday, breaking below the support (now turned into resistance) barrier of 14.26, marked by yesterday’s low. Yesterday, the metal tried to edge north, but hit resistance slightly below the downside resistance line drawn from the peak of the 2nd of November, and then, it pulled back. Although the daily chart paints a neutral broader picture, with the price oscillating between 15.00 and 13.88 since the 15th of August, the aforementioned short-term trading activity suggests that some further declines within the range may be in the works.
In our view, the break below 14.26 may have opened the way for the 14.10 zone, which is near the lows of the 27th and 28th of November, as well as the inside swing high of the 13th of the month. If, this time, the bears prove strong enough to push the white metal below that key support zone, then we may see the slide extending towards 13.95, or even the 13.88 obstacle, marked by the low of the 14th of November.
Our short-term oscillators corroborate our view. The RSI topped slightly above its 50 line and then dropped below that equilibrium barrier, while the MACD, although slightly above both its zero and trigger lines, shows signs of topping.
On the upside, we would like to see a decisive break above 14.42 before we start assessing whether the bulls have gained control over the metal, at least in the near term. Such a break could confirm a break above the aforementioned downside line and would also confirm a forthcoming higher high on the 4-hour chart. Such a break may initially target the 14.53 resistance hurdle, the break of which may set the stage for more bullish extensions, perhaps towards the 14.70 zone, which is near the highs of the 6th and 7th of November.
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