Silver Price Analysis: Watch these key consolidation levels for a break
- Silver trades 0.73% lower as the dollar reverses from its lows.
- There is a triangle chart formation on the hourly chart.
Silver 1-hour chart
Silver is in full consolidation mode at the moment after the recent price rise. Silver has risen for eight straight weeks but this week the precious metal has started on the back foot. Also in 2020 alone, the price has moved from a low of 11.63 to a high of 26.19. Silver seems to respect technical levels very well. The point where the price stopped moving higher was the consolidation low from September 2011 to July 2012.
Looking closer at the hourly chart, the key feature is the black triangle pattern. A break of this pattern could help us determine the future direction of the metal. On the topside, the next resistance is at USD 25 per ounce. Beyond that, a break of the high of USD 26.20 per ounce could mean that the bull trend is back on. Looking lower down now, there are a couple of key areas to watch. First up is the green support line at USD 23.18 per ounce but below that is the main area at USD 22.33 per ounce.
The indicators are pretty mixed at the moment. The MACD histogram is red but the signal lines are above the mid-level. This normally indicates that the pair is still in an uptrend. The Relative Strength Index is just at the 50.00 line as the market is moving sideways. Overall the metal is still in a firm uptrend but at the moment there is a strong consolidation pattern. If the resistance levels break it could be a good area to catch the trend again.
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Additional levels
Author
Rajan Dhall, MSTA
FX Daily
Rajan Dhall is an experienced market analyst, who has been trading professionally since 2007 managing various funds producing exceptional returns.
