Silver Price Analysis: Spikes higher and threatens to break back above key resistance

Silver (XAG/USD) pops higher after market-moving data on Wednesday and attempts to break back above a key resistance level at $30.00, the top of a four-year consolidation range. 

The precious metal temporarily rises above the red 50 Simple Moving Average (SMA) reaching a high of $30.26 after the release of US Consumer Price Index (CPI) data, however, it has fallen back down and is currently trading in the $29.90s. It is unclear whether it will break back above the resistance level on a closing 4-hour period basis or not. 

Silver 4-hour Chart 

Prior to the spike, Silver had fallen to a new lower low of $29.04, just below the 200 Simple Moving Average (SMA).  

A break back below $29.04 (June 11 low) would confirm another lower low, continuing the sequence of Silver’s step declines since it rolled over from its peak at $32.51 established in May. 

There is a possibility it could fall to an initial target at $28.21, the 0.618 Fibonacci ratio of the height of the range that unfolded in the second half of May, extrapolated lower. This is the usual method used by technical analysts for establishing targets after breakouts from ranges. Further bearishness could see Silver even reach as low as $27.19, the 100% extrapolation of the height of the range lower. 

Alternatively a close back above the $30.00 resistance level would bring the short-term bear bias into doubt. A move above the $31.55 lower high would suggest the possibility of a recovery back up to the range high at $32.51 and a change in the short-term trend.