Silver Price Analysis: XAG/USD tips top of range and reverses lower
|- Silver price rises up and tips the top of a long-term range before reversing lower.
- It has formed a Bearish Japanese candlestick pattern, enhancing the reversal thesis.
- A move back down to a cluster of MAs in the 23.000s is foreseen subject to a continuation of the weakness.
Silver price (XAG/USD) is trading in the $24.750s on Friday, after touching the top of a multi-month range at roughly $25.700 and reversing lower.
Silver formed a Bearish Engulfing Japanese candlestick pattern on the daily chart on Thursday, which reinforces the reversal and suggests more downside in the short-term.
Silver versus US Dollar: Daily chart
The Moving Average Convergence/ Divergence (MACD) momentum indicator is threatening to cross below its signal line, adding credence to the bearish reversal. The MACD is a particularly reliable indicator within range-bound markets and a cross would provide a good sell signal.
If the pair breaks below 24.405 it will probably continue south to a potential target at the cluster of major moving averages, in the lower 23.000s, starting with the 100-day Simple Moving Average (SMA) at 23.475.
A break back above the 25.770 highs of Thursday, however, would indicate a probable extension of the uptrend.
A decisive break above the range highs would indicate even more bullish momentum higher. Such a move would be expected to then reach a conservative target at the 0.618 extrapolation of the height of the range from the breakout point higher, and a target at 28.524.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.