Breaking News

Silver Poised For Bigger Moves

By Blackwell Global (Alex Gurr)ForexFeb 22, 2014 02:53PM ET
Silver Poised For Bigger Moves
By Blackwell Global (Alex Gurr)   |  Feb 22, 2014 02:53PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

The Silver market has been running red hot recently, as traders have looked to push up the value of Silver on speculation that the US economy is weakening, and as risk appetite for precious metals comes back into vogue for traders and hedge funds.

<span class=XAG/USD" title="XAG/USD" height="242" width="474" />

Source: Blackwell Trader (Silver, H4)

Market momentum in the Silver market has been exciting, and liquidity and volatility are certainly very high, leading to opportunities for Silver. With its bullish trend line dominating the charts combined with positive market sentiment, it looks likely that further highs are on the horizon. Currently, Silver is consolidating in a wedge and looking to move upwards again. This consolidation comes after lacklustre data from the U.S overnight as inflation was flat, leaving the options of further stimulus open to the FED, and Initial Jobless Claims falling to just 336k – slightly off analysts’ expectations.

The present price movements of Silver have been heavily influenced by the current fib level drawn from the last big move lower. In the likely event that the wedge looks to consolidate a little further before breaking out, it would move lower, finding support at the 61.8 fib level at $21.45 before bouncing up strongly I believe. Resistance can be found at the psychological level of $22.00 and at $22.35 as markets have met strong resistance in the past months there, as Silver rallied lower.

Indicators are also pointing to more upward movements, with the RSI showing strong buying signals as of late as it looks to push higher on the metals rally.

<span class=XAG/USD" title="XAG/USD" height="242" width="474" />

Source: Blackwell Trader (Silver, H4)

If the wedge was to move downwards, I would expect it to likely find support at $21.00 just above the 50.00 fib mark, this psychological level will most likely be a good point for traders to pause, and also will start to push on the trend line in the market. It's unlikely that we would see a crash through the trend line, just based on the strength of the market at present and the trend line’s slope, plus the amount of market testing it had early on.

While Silver has looked to slow down and consolidate, the current wedge forming on the 4H chart signals to me that there is a breakout in the works. Market participants and traders will likely be aware of this and look to test the edges after a bounce lower. Traders should go in with an open mind regarding the potential for catching the wave out of the wedge on either side - with the most likely scenario being a push upwards. Additionally, while all the focus of this article has been on Silver, it's worth pointing out that Gold has a strong correlation in terms of movements, and the upward momentum of Gold will also have the same effect on Silver markets.

Silver Poised For Bigger Moves
Silver Poised For Bigger Moves

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Post also to:
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Post 1000
Please wait a minute before you try to comment again.
Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Add Chart to Comment
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email