Silver Price Analysis: 161.8 per cent lines up with the flag breakout
Although Silver is currently correcting lower, there is no clear indication as a change of trend. Our prime target level ($18.45-18.49).
Market highlights from the last week
Tuesday May 12: Precious metals secured a firm tone on Tuesday with support from a weaker dollar and confidence in longer-term fundamentals. There was also evidence of strong physical demand which underpinned sentiment
Wednesday May 13: Overall, gold made net gains to the $1,715 per ounce area while silver held just above $15.50 per ounce and there was little change on Thursday
Thursday May 14: Precious metals were resilient in the face of a firm dollar ahead of the New York open and moved sharply higher after the US open. There was an important element of unease over US-China tensions and concerns over the potential pace of economic recovery
Friday May 15: Demand for precious metals remained strong on Friday amid underlying concerns over US-China relations. Extremely accommodative central bank policies and upward pressure on budget deficits were also major factors boosting demand
Monday May 18: Precious metals initially made further gains during Monday and a weaker dollar offered net support. There was, however, sharp selling after the New York open as risk appetite improved sharply
Silver Price Analysis
Let us have a look at the technical viewpoint:
Monthly: Recovered 50.93 per cent from the March base of $12.90. All the April’s price action was confined to the March selloff, an indecisive Inside Month. Strong buying pressure in May has resulted in the March high being tested.
Weekly: Continues to drive to the upside. A 161.8 per cent extension level is located at 18.49
Daily: Broken out of the channel formation to the upside. This can be seen as a bullish flag pattern. The measured move target is seen at $18.45
Outlook: Although Silver is currently correcting lower, there is no clear indication as a change of trend. With the 161.8 per cent level lining up with the flag target, this zone is our prime target level ($18.45-18.49)
Possible trade setup
Action: Buying at 16.30
Potential return on risk to first target: R3.3 (reward 200 / risk 60)
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