Silver Price Prediction: Silver makes tentative break above trendline
- Silver breaks tentatively above the trendline, however, it is pulling back on Monday.
- It is broadly in a short-term uptrend which could extend higher.
Silver (XAG/USD) has broken tentatively above a key trendline in the $30s. It is not clear whether the break is definitive, however, since Friday’s breakout day has been followed by a pullback on Monday which is testing the trendline.
Silver Daily Chart
Silver has been in a short-term uptrend ever since the early August lows, except for a period between August 26 and September 3 when it corrected back. As it is a principle of technical analysis that “the trend is your friend” the odds favor more upside. A close above $31.43 (September 20 high) would indicate a probable follow-through to $32.94.
The move up from the August lows could also be characterized as a Measured Move price pattern. These are large zig-zags composed of three waves, labeled ABC. It is another characteristic of these patterns that waves A and C are usually of a similar length. This is the case with Silver. This suggests the pattern may have finished and prices could pullback, although there is no way of predicting how far. There are no strong signs it is about to correct.
There is initial support at around $29.50 from the 100-day Simple Moving Average (SMA) followed by $29.18 (June swing lows).
Silver is in a medium and longer-term sideways trend which provides no underlying cyclical bias in either direction.
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.
