Silver technical analysis: 100-day moving average offers critical support
19:13, 29 September 2020
Silver suffered its worst weekly decline in nine years last week, as traders sold the popular metal and moved back into the US dollar.
Silver price technical analysis shows that a recovery back towards $26 remains possible while bulls maintain the price above the metal’s 100-day moving average.
Silver medium-term price trend
Silver declined by more than $5 last week, as the metal broke under a large triangle pattern and subsequently fell to its weakest trading level since July this year.
Silver technical analysis over the medium term shows that a key rising trendline has been broken, placing the emphasis on further downside.
Technical analysis on the daily time frame shows that the key trendline breakout remains valid while the price trades under the $23 resistance zone. The key trendline in question is formed by attaching the current yearly trading low to the July monthly swing low.
Buyers must now defend the metal’s 100-day moving average, around the $21.70 level, to avoid an even steeper decline towards silver’s 200-day moving average around $19.
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Silver short-term price trend
Silver price analysis over the short term shows that bears are in full control of the metal while the price trades below the $26.45 resistance level. The 30-minute time frame shows that a bullish MACD divergence has built during last week’s massive sell-off towards the $21.70 area.
According to technical analysis, bullish MACD divergence has formed around the $25 level, as the MACD signal line rises while the price has been falling.
If bulls can force a sustained breakout above $23 then the bulls may attempt to reverse the bullish divergence around $25.
Silver technical summary
Silver price technical analysis shows that bulls need to defend the $21.70 level this week to avoid a more protracted decline below the $20 support barrier.
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