Silver has confounded many, rebounding strongly throughout this week and bringing a more bullish outlook to many within the markets. However, signs are pointing to a critical inflection point whereby a key moving average could force a trend-line break, thus giving a more bearish bias for the end of the week.
The daily chart below indicates the fact that silver has touched and rejected the 100 day moving average today, with US data now effecting the pair to the downside. The break out from the descending channel was highly significant previously and thus led to a strong reaction from the markets. However, these may have been overdone somewhat and a pullback may be in process.
The hourly chart points to the existence of a key ascending trend-line, which has been broken but not confirmed. A close below this trend-line would likely preclude a downturn for the coming period. Thus at the end of this hour, if the candle closes below the ascending trend-line, it would bring a more bearish tone to the pair. In that instance, a primary level of support would be expected at 21.5.
Author: Joshua Mahony