Silver Price Analysis: Short-term rising but RSI exits overbought

Silver makes higher highs as short-term uptrend favors longs.
Silver has just exited overbought according to the RSI increasing chances of a pull back.

Joaquin Monfort FXStreet

Silver (XAG/USD) is posting higher highs and higher lows as it rises up on the 4-hour chart. This suggests the commodity is probably in a short-term uptrend, and because “the trend is your friend” the odds favor a continuation of that trend higher.

Silver 4-hour Chart

Silver has just broken above a key long-term support and resistance level at $28.71 and this further confirms its bullish short-term bias.

The precious metal is now close to the August 2 high at $29.23 where it will meet further technical resistance, however, given the short-term uptrending bias it will probably overcome the resistance eventually and continue higher.

Beyond that, upside targets lie at $29.44 (July 24 swing high) and $30.59 (July 18 swing high).

The Relative Strength Index (RSI) has just exited overbought, however, indicating an increased chance of a pull back unfolding. Such a correction could see Silver temporarily return to $28.71, or possibly even support at $28.52 (August 15 swing high).

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.

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