Silver, in its hourly chart, shows the reaction in a previous congestion zone between levels of $17.804 and $17.930 per ounce. The lower lows sequence observed in earlier sessions, makes us suspect that Silver could develop a new drop.
According to the Elliott wave perspective, we distinguish a bearish incomplete corrective sequence. The precious metal should start a bearish wave 'c' of Minute degree labeled in black, which could visit fresh lows.
On the other hand, the strength showed by the US Dollar Index (this week gains 0.21%) provides us an additional argument to think in the short-side.
A sell position will trigger if the price closes below $17.753 per ounce. Our conservative scenario foresees the first target at $17.616; if the precious metal extends its drops, the price could test the level $17.494, and even $17.158 per ounce.
The level that invalidates our bearish outlook is placed at $18.064 per ounce.
Finally, the risk of our bearish perspective comes from the latest CFTC report. In the last release, institutional traders informed that they hold 71.85% of long positions. This positioning level makes us suspect that big participants continue looking more upsides in Silver futures.
Trading Plan Summary
Entry Level: $17.753.
Protective Stop: $18.064.
1st Profit Target: $17.616.
2nd Profit Target: $17.494.
3rd Profit Target: $17.158.
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