Silver - Looking for a Second Bearish Leg

EagleFX Team EagleFX

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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Author

EagleFX Team

EagleFX

EagleFX Team is an international group of market analysts with skills in fundamental and technical analysis, applying several methods to assess the state and likelihood of price movements on Forex, Commodities, Indices, Metals and

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