Silver continues to respect the boundaries of the symmetrical triangle that it is still trading within. It looked like that on Thursday, it would move outside of the formation to the downside, but Silver never closed below the triangle’s lower side, and rebounded to close the day somewhat positive. Friday was followed by some more recovery, but this was still not enough to help close the week in the green. Looking at the bigger picture, we can see that the 200 EMA is acting as a magnet that doesn’t allow the price to move too far from it.
OUTLOOK (SCENARIO A / B)
For now, we remain neutral and wait for a break of some key levels before getting confident on any direction. On the upside, we see the 16.63 area as the first potential resistance. Slightly above that area lies the 200 EMA, which could act as the next resistance obstacle, given that in the past, it acted exactly as that. The line could be difficult for Silver to overcome, judging by the historic price action. That said, if there is a case where we see a break above the 200 EMA, then we could start considering the upper side of the triangle, as a potential target for Silver to reach.
Alternatively, a close below the 16.30 level could start raising some concerns about the upside potential and Silver could try and make its way again towards the lower side of triangle, where the big battle between the bulls and the bears could start putting a lot of pressure on the precious metal. A break below that side could open the path towards the 16.05 level, which stands near the lowest point of May.
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