Created
: 2024.04.18
2024.04.18 22:25
Silver (XAG/USD) has broken out of the narrow range it was trapped in since the start of 2023, which ran from between roughly $21.00 and $26.00, and risen up to the top of a larger consolidation.
The precious metal has rallied rapidly over the last two weeks and reached the next key resistance level at the 2020 highs of $29.86. This is also the ceiling of a massive consolidation zone Silver price has been trading up and down in since 2020.
Since touching the top of the zone earlier this week XAG/USD has pulled back down to the $28.60s over the last few days.
The Relative Strength Index (RSI) momentum indicator has entered overbought territory at 71.96, which indicates Silver may be peaking. There is an increased risk of a pullback evolving and long holders are advised not to add to their positions.
It is rare for the RSI to reach overbought on the weekly chart. The last time this occurred was at the August 2020 highs over three and a half years ago. A considerable pullback then followed, which took Silver price back down to $21.00 - an over 30% decline.
It is too early to say the same will happen this time, but there is clearly a risk of a deep correction.
The short and intermediate-term trends are bullish, however, so there is also a possibility of a continuation higher.
A decisive break above the 2021 high of $30.07 would provide confirmation of a continuation higher and a breakout of the whole four-year consolidation Silver has been trading in. Such a move might be expected to reach $32.40 initially, where former resistance lies.
If a correction evolves, however, the exchange rate would be expected to fall to support from the former range highs at $26.00 initially, however, given the shorter time frame trends are bullish a recovery thereafter could very well also unfold.
Created
: 2024.04.18
Last updated
: 2024.04.18
FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.
We hope you find this article useful. Any comments or suggestions will be greatly appreciated.
We are also looking for writers with extensive experience in forex and crypto to join us.
please contact us at [email protected].
Disclaimer:
All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.
The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.
Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy