Silver is a wildcard in Metals, known for abrupt consolidation and ranges. No wonder that recently most commodities were showing mixed sentiment. Silver’s Price action is not an exception to the rule and both pressures are dominating now on longer time frames. From the perspective of Macro, one important factor is china; Recent import Export data from china created a small impact over the metals.
Silver went into consolidation price action from November 2015 till February 2016. Market even had a false breakout around 14.60 in the early December 2015. What’s interesting is in fact, Price action indicated the strength of buyers as large and strong bullish candlesticks, throughout the consolidation structure.
Important developments took place during January 2016, Bulls squeezed around the resistance by forming a strong base at support level 13.80. This was an indication of buying pressure and upcoming breakout of resistance 14.50. In the beginning of February 2016, Price action broke out of resistance 14.50 as expected. These bullish developments in silver were supported by gold prices trending higher.
Later Price action formed resistance at 15.94, a noticeable radar level which created a major selloff that ended at support level 14.60. The support level at 14.60 indicated the willingness of buyers to enter at dips and retracements. After a major rise from support level in the beginning of March, Silver once again stumbled around minor resistance level at 15.60; this indicated the conviction of sellers to offer at higher prices. Logically we can conclude that both bulls and bears are dominating the price action.
Silver prices may head higher, if it clearly breaks the resistance level at 15.94. In order for price action to turn bearish it should break the support level at 14.60. Traders should focus on the minor key levels and gauge the strength of both buying and selling pressure. One should stay sidelines till a clear picture emerges.
