Correction may be over: Silver technical analysis
Silver technical analysis points to further gains in the metal while price trades above the $17.50 level. Watch out for a strong rally if price moves above the $18.80 level.
Silver prices have pulled back sharply over recent days, however, silver price technical analysis suggests that the metal is still a solid buy on dips.
As long as bulls hold the price above the $17.50 level then the metal has a solid chance of testing back towards the current monthly and yearly trading high.
Silver medium-term price trend
Silver recently staged a strong pullback towards the $17.70 support level, after running into resistance around the $18.86 level.
Silver technical analysis shows that as long as bulls hold price above the $17.50 level then medium-term bulls remain in full-control.
Now that tensions between Iran and the United States have calmed down, a new bullish catalyst for silver price will need to present itself.
Central bank money printing or a renewed downturn in the global economy could provoke the next bullish move for silver price. Alternatively, weakness in the greenback could prompt another rally in silver.
Watch out for the uptrend in silver to continue whilst price continues to trade above the $17.50 level.
Silver short-term price trend
Silver price analysis over the short term shows that bulls are only in control while the metal trades above the $17.40 level.
The short-term technicals are showing that a bearish head and shoulders pattern is forming with significant downside potential.
The neckline of the bearish pattern is located around the $17.73 level. A break under this area could see silver prices falling towards the $16.90 support level.
Should we see silver rallying towards the $18.80 – and invalidating the bearish pattern – then a rally towards the $20.00 level would likely follow.
Watch out for a major breakout in silver prices once the $17.40 to $18.80 price range occurs.
Silver technical summary
Silver price technical analysis highlights that the $17.50 level remains critical to the upside potential of the popular metal. Traders should be mindful that a bearish head and shoulders is forming on the lower time frames.