Silver Price Analysis: Continues lower after Bearish Engulfing

Silver price continues falling after touching the top of its range and forming a Bearish Engulfing candlestick pattern.
The MACD has crossed its signal line giving a sell signal.
Silver price will probably fall towards a cluster of MAs in the $23.000s

Joaquin Monfort FXStreet

Silver price (XAG/USD) is trading in the $24.580s on Friday. It has just reversed after touching the top of a multi-month range.

Silver rallied up during the first half of March until it reached the ceiling of a long-term range at around $25.750. At that point it reversed and formed a Bearish Engulfing Japanese candlestick pattern on the following day, Mar 21 (circled).

A Bearish Engulfing is an indicator of a short-term reversal in price. It forms when a red candlestick’s whole daily range completely encloses, or “engulfs”, the previous day’s range. The appearance of the pattern adds a further bearish hue to the picture.

Silver versus US Dollar: Daily chart

The Moving Average Convergence/ Divergence (MACD) momentum indicator has crossed below its signal line, giving a sell signal. The MACD is an especially reliable indicator within range-bound markets and adds credence to the bearish view.

The pair will probably continue south to a potential target at the cluster of major moving averages, in the lower $23.000s. The topmost is the 100-day Simple Moving Average (SMA) at $23.550.

A break below the $24.320 levels of March 27 would provide more bearish confidence of a move lower.

Alternatively if bulls take back control, a break back above the $25.770 highs of Thursday would probably indicate an extension of the uptrend.

A decisive break above the range highs would indicate more upside. Such a move would be expected to then reach a conservative target at the 0.618 Fibonacci extrapolation of the height of the range from the breakout point higher, and a target at $28.524.

A decisive break is one in which a level is breached by a long green candlestick which closes near its high, or three green candlesticks that break above the level.

Author

Joaquin Monfort

FXStreet

Joaquin Monfort is a financial writer and analyst with over 10 years experience writing about financial markets and alt data. He holds a degree in Anthropology from London University and a Diploma in Technical analysis.

GBP/USD hits multi-week tops around 1.3560

GBP/USD gathers fresh steam and advances to new three-month peaks near the 1.3560 zone on Friday. Cable’s sharp move higher comes after three daily drops in a row and follows the increasing selling pressure hurting the Greenback.

EUR/USD pops to fresh two-month highs, targets 1.1600

EUR/USD advances markedly, revisiting the upper 1.1500s for the first time since mid-June. The pair’s sharp uptick comes on the back of a strong retracement in the US Dollar amid BoJ intervention chatter and despite steady uncertainty in the Middle East.

Gold picks up pace, approaches $4,400

Gold rebounds toward the $4,400 mark per troy ounce on Friday, reversing the previous day’s pullback. The precious metal’s recovery comes as fresh and intense weakness keep weighing on the US Dollar, while traders keep assessing easing expectations of an imminent Fed interest rate hike and the situation from the Middle East.

Pi Network Price Forecast: PI extends consolidation as bulls eye $0.10

Pi Network (PI) price holds steady on Friday, maintaining a consolidating tone for three consecutive days. Mild retail strength in the PI token remains stable, with Open Interest above $9 million, while social buzz eases. PI token’s technical outlook is mixed, as bearish momentum wanes to neutral, with bulls eyeing the $0.1000 psychological level.

Weekly focus: Some relief in US inflation concerns

Actual inflation data for July came out as expected with a 0.1% m/m increase in headline CPI and 0.2% excluding food and energy. Annual headline inflation remains too high at 3.4% and means that wage earners are experiencing stagnating spending power at best, and core inflation is a bit higher than the inflation target of two percent would suggest.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.