Silver edged south on Monday, breaking below 15.22, the lower bound of the short-term sideways range that had been containing the price action since the 17th of July. Meanwhile, the white metal continues to trade below the downtrend line taken from the peak of the 18th of June. Thus, having these technical signs in mind, we will consider the near-term outlook to be negative.
Yesterday’s slide was stopped near 14.97 and then the metal rebounded somewhat. If the bears are willing to shoot again from current levels and push the battle below 14.97, then we may see them aiming for our next support territory, around 14.63, marked by the lows of February 2016. Another break below 14.63 could set the stage for the 14.35 zone, defined by the low of the 7th of July last year.
Shifting attention to our short-term momentum studies, we see that the RSI bottomed within its below-30 zone and then exited that zone. The MACD lies below both its zero and trigger lines but shows signs that it could start bottoming soon. Therefore, we would stay on guard for a potential corrective bounce before sellers decide to take the reins again, perhaps for a test near the 15.22 territory.
Now if the 15.22 barrier fails to stop the price from rising more, we may experience upside extensions towards the aforementioned downtrend line, or the 15.50 resistance level. But even if this is the case, we would still see a decent chance for the bears to jump back into the game from near the downtrend line.
We would like to see a decisive move above 15.60, the upper bound of the short-term range we mentioned above, before we start examining whether the near-term outlook has turned to positive. Such a move could initially aim for the 15.76 resistance, the break of which could open the path towards the 16.00 area, fractionally above the peaks of the 12th and 13th of July.
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