Silver Price Analysis: Struggles to gather upside traction despite diamond breakout
|- Silver struggles to break above $17.50 despite the bullish 4-hour chart.
- A deeper decline could be seen if the diamond breakout seen on the 4-hour chart fails.
Silver is currently trading near $17.41 per ounce, representing a 0.21% gain on the day, having faced rejection near $17.50 on Thursday.
The metal witnessed a diamond pattern breakout on the 4-hour chart on Thursday. The pattern indicates that the rally from lows near $15.50 has resumed. So far, however, that has failed to invite a stronger chart driven buying.
The 4-hour chart MACD histogram has also crossed above zero, confirming a bullish reversal and validating the diamond breakout. Meanwhile, the relative strength index has violated a descending trendline. Even so, the shiny metal is hovering below $17.50.
If prices fall back inside the diamond pattern, some buyers could exit the market, leading to a deeper price decline. Chart analysts consider failed bullish continuation patterns as powerful bearish reversal signals.
On the downside, the lower end of the diamond pattern, currently at $16.91 is key support, which, if breached, would shift the focus to 15.84. Meanwhile, a convincing move above $17.50 would validate the bullish setup on the 4-hour chart and will likely yield a move to $18.00.
4-hour chart
Trend: Cautiously bullish
Technical levels
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