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.

GBP/USD flirts with tops near 1.3470

GBP/USD manages to regain composure and challenge the area of daily highs around 1.3470 on Friday. Cable picks up pace despite marginal gains in the Greenback in a context of swelling geopolitical tensions and rising global oil prices.

EUR/USD trims losses, back above 1.1500

EUR/USD picks up some pace and bouces off earlier lows, reclaiming the 1.1500 threshold and beyond at the end of the week. The pair’s modest pullback follows a persistent risk-averse market mood and renewed buying interest for the US Dollar.

Gold: The $4,000 mark holds the downside for now

Gold faces renewed selling pressure, falling sharply toweard the $4,000 mark per troy ounce as the US Dollar regains momentum. Escalating US-Iran tensions are keeping inflation concerns and expectations of further Fed rate hikes alive, weighing further on the yellow metal.

Bitcoin eyes 50-day EMA breakout, Ethereum consolidates, XRP steadies

Bitcoin, Ethereum, and Ripple trade near key technical levels on Friday as the broader cryptocurrency market pauses following last week's recovery. BTC is approaching the 50-day Exponential Moving Average while ETH continues to consolidate between two major EMAs.

Warsh needs to restore his reputation

We were glad to see our deeply negative reaction to the Warsh press conference was not some personal peculiarity. Just about everybody in the financial press felt the same way. The consensus is building it’s not the Fed in the dog-house but only Warsh. Today the WSJ changed it tune and blasted Warsh—"the honeymoon is already over..”

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.