Silver Price Analysis: Bears about to take back control?

Silver is struggling to convince on the upside and could be in the throes of a healthy correction.
The weekly chart offers a compelling downside case from an overextended W-formation.

Ross J Burland FXStreet

The price of silver has been in the hands of the bulls for the past few months as it corrects the correction of the strong monthly rally.

The following is a top-down analysis that illustrates where the next swing trading opportunity could arise from resistance and targeting a key confluence level on the weekly and daily charts.

Monthly chart

The monthly chart shows a W-formation that, at some point, will require a correction that would be expected to reach at least a 38.2% Fibonacci retracement level.

There could still be a continuation, although the weekly chart is showing more overextended signs of market structure.

Weekly chart

The weekly chart is a showing an overextended W-formation which would be expected to lead to a downside correction towards the prior highs of the pattern that meets the 38.2% Fibonacci retracement level.

Daily chart

The price has seen a strong rejection from resistance and could lead to a significant downside correction.

4-hour chart

A restest of the current support and failure will raise a higher probability of a downside correction to the W-formation's structure and the confluence of a 50% mean reversion of the latest daily bullish impulse.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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