Silver Price Analysis: The triangle pattern is still holding ahead of this weeks FOMC meeting
|- Silver has moved 1.89% higher on Monday as the dollar weakens.
- There is a big triangle chart pattern on the 4-hour chart.
Silver 4-hour chart
Silver has the problem of being both a precious and industrial metal. It does have a safe haven status and can track the movement of gold but the price action does often correlate with copper and iron ore. At the moment the chart structure is not really as bullish as gold as the trendline connecting to peaks is still intact. Gold broke the trendline which could be a more bullish signal.
Looking at the chart, the obvious key feature is the triangle pattern. This has formed because in this consolidation the price has made some higher lows and lower highs. The price is slowly moving toward the apex of the pattern and this week's FOMC could provide enough volatility for a breakout.
On the downside, the red line just above USD 26 per troy ounce looks like a firm support level. So if the greenback does strengthen this level could be a sticky point.
The indicators are both on the up. The MACD signal lines and histogram are above the mid-level and the Relative Strength Index is above 50. There is still room for the indictors to move higher, especially the Relative Strength Index as it has not reached the overbought zone.
The trend is still an uptrend and this period seems like a large consolidation pattern. This week's Fed meeting could be the fundamental catalyst that the market needs for the pattern to break and if there is an upside break the recent high at USD 29.85 per troy ounce could be tested.
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Additional levels
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