Silver Price Analysis: Silver bounces off support and approaches cluster of MAs

Silver (XAG/USD) has bounced off key support at the June 13 low, and is currently trading up towards the 50 and 100-period Simple Moving Averages (SMA). 

Despite the bounce, the precious metal is in a falling channel formation and the short-term trend is still, on balance, bearish. This suggests the odds favor bearish bets and a continuation lower once the recovery runs out of steam and rolls over. However, there are no signs yet that this is happening.

Silver 4-hour Chart 

If price does fall back down and pierces below $28.57, the June 26 low that would reconfirm the downside bias, with the next target lying at the lower channel line, at around $27.50. 

If Silver continues recovering and breaks on a closing basis above the 50 and 100 SMAs at $29.49 and $29.56 respectively, however, it would probably indicate a continuation higher to the upper channel line at around $29.90. This is also a major resistance level at the top of a four-year consolidation zone. A decisive break above that level would indicate a reversal in the short-term trend. 

A decisive break would be one accompanied by a long green up candle that broke clearly above the level and closed near its high or three green candles in a row that broke above the level. 

It is worth noting that Silver temporarily broke out of the top of the falling channel on June 20, and although it quickly fell back, the fact it breached the integrity of the channel, albeit temporarily, indicates the upper channel line has been weakened and is more likely to be broken again. This adds a slightly bullish tone to the charts.