Silver is following an interesting bearish channel at present and it is likely to consolidate before testing the trend line and rejecting off it.
The silver market certainly looks bearish at the moment and that looks set to continue. Within the channel we can see various periods of consolidation before large movements. We can see low volatility at present which signals consolidation and it is likely to test the trend line before it moves any lower.
The RSI on the H4 chart certainly looks bearish at the moment. It seems to touch the oversold level after big movements down and then it moves towards a more neutral position while the price is consolidating, as we can see at present. This gives the RSI plenty of room for another bearish movement.
It would pay to take note of the overall picture in the case of Silver as there is a very large pennant shape forming on the daily chart that dates back over a year. The bearish channel has taken price down close to the bottom line of the pennant shape, so we can expect a reversal at some point soon. Until then, enjoy the bearish movement while it is here.
$19.30 an ounce could become a critical level for Silver as this is the bottom of the previous consolidation level and could coincide with the bearish trend to form a nice pivot point. We can expect the price to meet serious support around the $18.72 level as this is where the channel will meet the bottom of the above mentioned pennant shape. It will not be a big movement, but it would be surprising if the bearish trend were to reverse before hitting the bottom of the pennant.
Silver is following a bearish channel and the price looks to consolidate before testing it again. Watch for the bottom of the pennant shape to act as heavy support and a possible turning point in the silver market.