Silver Bullish Momentum Persists

Piles of Silver in increasing order
.09 Apr 2024
author avatar image Andreas Thalassinos

Table of Contents

Briefing on Silver

Title: Silver Bullish Momentum Persists
Financial instrument: Silver
Timeframe: Daily
Session: Tokyo
Trend: Up
Trend Confirmation: Exponential Moving Average(EMA), Moving Average Convergence/Divergence(MACD), Relative Strength Index (RSI), Momentum
Momentum: MACD above its Signal Line
Support Levels: 26.552, 26.762, 24.312
Resistance Levels: 28.374, 29.302, 31.124
Trading Strategy: Buy on Breakouts, Buy on Dips

High Impact Economic Events

Wednesday, 02:00 am (GMT+0): Official Cash Rate (NZD)
Wednesday, 12:30 pm (GMT+0): Core CPI m/m (USD)
Wednesday, 01:45 pm (GMT+0): Overnight Rate (CAD)
Thursday, 12:15 pm (GMT+0): Main Refinancing Rate (EUR)
Thursday, 12:30 pm (GMT+0): Core PPI m/m (USD)
Thursday, 12:30 pm (GMT+0): PPI m/m (USD)
Thursday, 12:30 pm (GMT+0): Unemployment Claims (USD)
Thursday, 05:01 pm (GMT+0): 30-y Bond Auction (USD)
Friday, 06:00 am (GMT+0): GDP m/m (GBP)
Friday, 02:00 pm (GMT+0): Prelim UoM Consumer Sentiment (USD)

Trend Analysis – Silver Bullish Momentum Persists

Silver April 9

The price of Silver has exhibited a significant upward move since February 16. After reaching a daily trough of 21.913, the price rebounded to form a technical reversal to the upside, commonly referred to as a failure swing. This reversal pattern was characterized by a higher trough at 21.921, followed by a breach of the peak at 23.313, which paved the way for a bullish trajectory. During this period, the bulls were able to pull the price higher to 28.127 and established the price of Silver above the dynamic support of the 50-period Moving Average.

This recent price action suggests a bullish sentiment in the market, with a possible correction to the downside. These developments indicate that further upward momentum may be in store for Silver. However, the bullish trend may be subject to correction in the near term.

Indicators and Oscillators Analysis

The Relative Strength Index (RSI) is hovering above its 50 baseline, indicating that the pair has moved to an upward trajectory. Also, it has recently moved into the overbought territory. However, traders should exercise caution, as RSI alone may not be a reliable indicator. Additionally, the Bollinger Bands suggest widening volatility as the Upper and Lower Bands diverge in prices. At the same time, the Middle Band serves as immediate support to any potential downside correction. The Exponential Moving Average and the Moving Average Convergence/Divergence (MACD) also confirm the upward movement. In particular, prices are trading above the Moving Average line, and MACD is above the zero baseline. Additionally, the Stochastics crossed in the overbought zone, above 80. Moreover, the MACD oscillator indicates a bullish momentum, with the MACD above the Signal line.
On the other hand, the Momentum oscillator displays a negative divergence with price.

Key Support Levels for Silver

In the current market scenario, the bulls hold the reins of the precious metal, and the price of Silver will likely continue to rise. The initial support level is seen at 22.252, and a further decline may lead to a breach of this level. If that happens, the next support level at 25.762 could come into play. The violation of this level may indicate further potential for a downturn, and the next significant support level is estimated to be 24.312. It is crucial to closely watch these support levels to gauge Silver’s future direction.

S1–>22.252
S2–>25.762
S3–>24.312

Key Resistance Levels for Silver

If the bulls maintain control of the market, a potential correction to the upside may yield gains in the future. However, resistance is likely to arise at various levels. The initial resistance level is estimated to be approximately 28.374; subsequently, resistance is projected to be witnessed at 29.302 and 31.124, respectively. These levels of resistance could pose a challenge to the market’s upward momentum. Nonetheless, with careful consideration of market trends and strict risk management tools, it is possible to navigate these obstacles and mitigate risks.

R1–> 28.374
R2–>29.302
R3–>31.124

Trading Strategy for Silver

Based on the technical analysis, traders may consider adding to their positions above the recent high of 28.127, which was marked on April 9.
On the other hand, aggressive traders may explore short-term buying opportunities on dips toward support levels and the Middle Band, with tight stop-loss orders to manage risk effectively. Additionally, if the bullish momentum persists and candlesticks close above the Upper Bollinger Band, indicating a continuation of the uptrend, traders may take advantage of the rising prices with long positions.

Conclusion

In conclusion, the technical analysis of Silver suggests a bullish outlook with the possibility of a short-term correction to the downside, with Silver testing critical levels. Traders should closely monitor price action around key support and resistance zones and relevant technical indicators to identify potential trading opportunities and manage risk effectively in the current market environment.

author avatar image
Andreas Thalassinos

Experienced educator with a demonstrated history of working in the financial services industry. Skilled in Technical Analysis, Market Risk, Asset Management, Stock Market, and Trading Systems. Strong professional with a MSTA by Society of Technical Analysts (UK), CFTe and MFTA focused in Master of Financial Technical Analysis from International Federation of Technical Analysts (USA).