Silver Price Analysis: Bears on top but need to break 200-D SSMA
- The bears are testing bullish commitments at a critical support zone.
- Bears will seek a break from there for prospects of a downside continuation.
The price of silver has been consolidating after a fall overnight ahead of the Jackson Hole and Federal Reserve chairman Jerome Powell's highly anticipated keynote speech.
The US dollar has firmed in a risk-off setting which has pressured silver to a critical level on the daily charts.
The following illustrates the various market structures and prospects for both the upside and downside for the days to come.
Daily chart
The price has broken the 38.2% Fibonacci retracement but went on to fail and post a double top.
This is yet to be confirmed as a reversal pattern by subsequent price action.
However, the price will be in the bullish territory on a break of the 200-day smoothed simple moving average near 23.55.
There are prospects of a daily reverse bullish head and shoulders forming near 23.20, but the long wick as eclipsed in the chart likely invalidates the pattern.
The wick represents the monthly rejection from below 22.00 that could well be filled in by the end of the month.
hence, a break of 23.00 and then 22.00 opens the risk of a weekly downside continuation.
On the upside, the 27 July lows near 24.50 are the next probable resistance zone which aligns with the 61.8% Fibo.
Beyond there we have more daily resistance structure near 25.50.
A break of the trendline sees a run on 26.00 stops and prospects of a continuation of the long-term bullish trend that puts 28.00 on the radar.
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.
