Silver Price Prediction: Uptrend to likely extend to range high, RSI overbought

Silver is rallying towards the ceiling of a broad range.
The RSI is overbought, however, suggesting the risk of a pullback evolving.

Joaquin Monfort FXStreet

Silver (XAG/USD) is trading in an up leg towards the top of a broad range that stretches from the $26s to the $30s.

Silver is bullish over the short term, and given it is a principle of technical analysis that “the trend is your friend,” more upside is favored.

Silver 4-hour Chart

Silver will probably continue higher toward the range high at roughly $30.90 before encountering resistance from the ceiling.

Silver is overbought, however, according to the Relative Strength Index (RSI) momentum indicator. This advises traders not to add to their long positions. If RSI moves back out of the overbought zone, it will provide a sell signal and indicate a probable correction is evolving.

Such a correction might find support either in the $29.60s (August 28 high) or, if deeper, at the $29.18 former mini-range high.

However, given that the short-term trend is bullish, the correction is likely to eventually run out of steam and the uptrend to resume, pushing Silver to new heights.

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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