Silver Price Analysis: Jumps Up and Threatens to Break Above Key Resistance

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Silver Price Analysis: Jumps Up and Threatens to Break Above Key Resistance

  • Silver gains in value after the release of inflation data in the US.
  • It is threatening to break the essential resistance level at $30.00.
  • At the same time, the precious metal continues to make lower lows, suggesting a bearish bias in the compact term.

Silver (XAG/USD) is gaining ground following Wednesday’s market-moving data and is trying to break the key resistance level at $30.00, the upper end of a four-year consolidation range.

Following the release of the US Consumer Price Index (CPI) data, the precious metal temporarily rose above the red 50 straightforward moving average (SMA), reaching a high of $30.26, but fell again and is currently trading at $29.90. It is unclear whether it will break above the resistance level or not in the last 4 hours.

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Silver 4-hour chart

Before the peak, silver dropped to a up-to-date low of $29.04, just below the 200 Simple Moving Average (SMA).

A break below $29.04 (the June 11 low) would confirm another lower low, continuing silver’s sequence of gradual declines since breaking through the high of $32.51 in May.

There is a possibility of it falling to the initial target of $28.21, which is a Fibonacci ratio of 0.618 of the height of the range that developed in the second half of May, extrapolated lower. This is the usual method used by technical analysts to set targets after range breaks. A continued bearish trend could result in silver falling as low as $27.19, which is a 100% extrapolation of the lower range high.

Alternatively, a close above the $30.00 resistance level would call into question the short-term bearish sentiment. A move above the low high of $31.55 would suggest the possibility of a return to the high of $32.51 and a change in the short-term trend.

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