Silver started to lose upside traction last week, and followed the price of gold lower after the Federal Reserve policy statement sounded less dovish than market participants had been expecting.
Silver price technical analysis shows that a $2 directional move in the widely traded metal is close to taking place.
Silver medium-term price trend
Silver has another important week ahead, following a failed upside breakout, and a short-lived downside breakout after last week’s FOMC meeting.
Silver technical analysis over the medium-term shows that a breakout from the narrowing triangle pattern is predicting a $2 directional breakout.
Technical analysis on the daily time frame shows that the triangle pattern is now located between the $26.10 and $28.10 levels.
Once silver finally stages a breakout from the mentioned triangle pattern, a fast paced directional move is likely to take place.
Key support prior to the $26.10 level is found at the $26.45 and $26.20 areas, while key resistance is found at the $27.30 and $27.60 price zones.
Silver short-term price trend
Silver price analysis over the short term shows that bears are in control while the price trades below the $26.80 support level.
The four-hour time frame shows that a bearish head-and-shoulders pattern has been created, following the recent reversal from the $27.60 area.
A false downside breakout occurred last week beneath the neckline of the bearish pattern, around the $26.60.
If bears can force a sustained breakout under the neckline of the head-and-shoulders pattern this week, then silver could fall towards the $25.50 area.
If the price reverses above the $27.60 level, then a counter rally towards the $28.60 area may take place.
Silver technical summary
Silver price technical analysis shows that a major breakout in the metal is looming. Watch out for a major move in the price of silver once the $26.10 to $28.10 price range is breached.
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