- Silver marks new higher highs in the year to date
- Some caution required as former resistance area is nearby
Silver bulls roared back during Wednesday’s late European trading hours, with the metal soaring to a more-than-three month high of 25.14 before closing marginally below the 25.00 round level.
The completion of a double bottom pattern around the 21.91 floor led to a bullish explosion, as the price advanced above the neckline of 23.51. While the bullish market structure in the short-term picture is still solid, the overbought signals coming from the RSI and the Stochastic oscillators suggest that upside pressures might soon lose steam.
The presence of the descending line, linking the 2021 and 2023 highs, could create downward pressure at 25.45, hindering any potential rise to the crucial 26.00 psychological level. Note that the metal has been attempting to close above the latter without success since the summer of 2021. Hence, if bullish efforts prove fruitful this time, the price might gear up to the 2022 high of 26.90 and then push towards the 28.15 barrier from May 2021.
If the price gets rejected near the 25.00 threshold, it may revisit the 61.8% Fibonacci retracement of the May-October 2023 downleg at 24.00. Failure to pivot there could see a bearish continuation towards the 50% Fibonacci of 23.37 and then an extension to the 38.2% Fibonacci of 22.73. The tentative support trendline, which joins the September 2022 and October 2023 lows, could cause bigger damage to the market if violated around 21.93.
Summing up, silver has experienced strong progress over the past two weeks, though a major resistance area is still overhead, questioning whether the metal will manage to violate its neutral 2023 pattern above 26.00.
