Silver with a chance for a major upswing
Alpari Research & Analysis | Jul 31, 2017 08:24AM ET
It looks like the worst days on Silver are over. We fully recovered after the flash crash from the 7th of July and successfully maintained the channel up formation (red lines) for the last 16 trading days. Currently we are below a very important mid-term resistance but we do have few signs that it will be broken soon and the new bullish wave will start.
What technical signals are promoting the optimism here? First of all, we do have this channel up formation mentioned above. Secondly, the price came back above the long-term up trendline (black). What is more, on Thursday, the price created a shooting star on the daily chart with a long head bouncing of a local resistance. You may say that this is a bearish sign and yes indeed you are right. That was a negative sign but it did not cause the retracement here. So the sellers had a great occasion to go down but they did not use that and the price went north and made new higher high. That shows the weakness of the bearish camp and is another plus for an upswing. In addition to that, we are currently breaking the mid-term down trendline (pink), with no defence from the sellers, which significantly increases the chances for a success here.
The last important resistance on the chart is the green area around the 16,8 $/oz respected here from the January this year. Once this one will be broken there will be no excuses for the further upswing. Positive sentiment on the Gold and the ongoing Dollar weakness should promote this scenario in the next few days or even weeks.
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