- Silver remains depressed around intraday low, teases confirmation of a bearish chart pattern.
- 200-HMA pullback, pessimistic Momentum reinforce bearish bias.
- A two day old downtrend line adds to the upside barriers.
Silver (XAG / USD) is flirting with bearish formation, namely the head and shoulders, retreating to $ 26.10, down 0.13% during the day, in the middle of Thursday’s Asian session .
Not only is the metal trading near the neckline of the indicated bearish pattern, but the downward sloping Momentum line and a U-turn against the 200-HMA resistance is also supporting the sellers.
However, a sharp break down of the $ 26.00 threshold will be required before any hope of a collapse towards the theoretical target below the previous month’s low of $ 25.30.
During the fall, the June low around $ 25.50 could act as an intermediate stop while the $ 25 could probe silver bears afterwards.
Alternatively, a bullish breakout of 200-HMA, around $ 26.20, will trigger a corrective pullback towards the short-term resistance line near $ 26.30, a break of which will cause buyers to challenge the pattern suggesting a downtrend. while targeting $ 26.50.
Overall, pares have recently rebounded from a multi-day low, so sellers’ expectations are justified.
Silver: hourly chart
Trend: new weakness expected