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Silver: Bullish Pressure Mounting Beneath 20.50?

ByMatt Simpson
Published 01/14/2014, 12:20 AM
Updated 08/22/2024, 06:01 PM
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SUMMARY:
- 20.50 is a pivotal area to watch
- Upward break opens up 23.00
- If this level holds then next target is 18.13 swing low
- Decliing volume favours upside breakout, along with Gold and suggest further weakensss for USD

SILVER WEEKLY:
Since the 48.15 high back in May 2011 the primary trend has been clearly bearish. However after rejecting the 18.13 low in June this year, the recent decline appears to be losing momentum and forming buying pressure beneath 20.50 resistances.

We are now in our 8th consecutive week of sideways trading but we have spent the majority of this time at the upper range between 20.50 and 18.13, to suggest the buying pressure. Additionally Hammers have been forming (Bullish and Inverted) to further suggest the weakening of the prior decline from the 25.15 swing high.

At time of writing we reached in interesting juncture as price hovers beneath the resistance level and the declining trendline. On one hand the trendline may indeed hold and see a subsequent move back towards the 148.13 low, and a break below this level to confirm a resumption of the dominant bearish trend from the $25 high.

However an upward break of 20.50 high would be a significant victory for the bulls to suggest a retracement back towards 23.00 on the weekly charts.

In turn this would have weaken the USD, and would presumably correlate with Gold as it has a very string tendency to do.
Silver Weekly
iSHARES SILVER ETF: Volume favours corrective price

The chart below is taken from iShares Silver Trust ETF, (SLV) as this also includes volume. We can see how volume has been declining along with price which makes me suspect the move is corrective and pending an upward breakout.
SLV Weekly

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