Silver fell to a low of 25.53 after the June FOMC increase in US real yields. Silver could recoup some of June’s 10.6 percent loss thanks to a drop in momentum and a low reading on CFTC open interest. There are, however, resistance levels to clear. One to watch is 28.03, which sits on the boundary line of a triangular formation on the weekly charts. As Benjamin Wong, Strategist at DBS Bank, points out, there is a Fibonacci marker at 27.16 below that.
“Silver’s drop was halted at 25.53 on the weekly charts by a trend support line that stretches back to 19.25, the lows of late July 2020. The DMI ADX momentum indicator has switched to neutral territory, with both +DMI (bullish) and -DMI (bearish) stacked at a 19-20 read (we need a read around 23 to extract any meaningful momentum).”
“Further range hemming as a triangle pattern that requires resolution appears to be a possibility in the near future.”
“Silver has the opportunity to do a small grind up in pricing from its recent 25.53 lows, with support set at the 55-day moving average of 25.28 and at 25.02.”
“Silver is likely to recuperate some of the ground it lost in June, but given the low momentum, this is unlikely. This means that the triangle’s dropped-down boundary line, which gives resistance around 28.03, is still a stumbling barrier. The first locus poin is the 61.8 percent Fibonacci retracement of the mid-May peak at 28.17 against the previous 25.53 lows at 27.16 “”Go ahead.”
“We continue to take a cautious approach, as recommended in our previous recommendations, while pursuing a medium-term level of value. The June FOMC’s hawkish stance has changed the game.”/n
