Commodities

Technical Analysis – Silver waits patiently for fuel in a still-negative picture

Posted on December 19, 2019 at 2:40 pm GMT

Anthony Charalambous, XM Investment Research Desk

Silver is attempting to move below the 16.95 level, which is the 50.0% Fibonacci retracement of the up leg from 14.28 to 19.63 and where the 20-day simple moving average (SMA) presently lies. Even though negative momentum has weakened, the bearish demeanor of the commodity appears to be assisted by the bearish crossovers and the capping of the price by the downward sloping 50-day SMA and restrictive trendline drawn from the 35-month high of 19.63.

The short-term oscillators reflect the dry up in directional momentum but are negatively skewed. The MACD is above its red trigger line but below the zero point, while the RSI is at the neutral mark leaning towards bearish regions.

To the downside, if sellers dive below the 16.95 area, the 16.51 low of December 9 may be next to restrict the drop. Steering lower, the fortified 16.32 barrier – consisting of the 61.8% Fibo and 200-day SMA – could prevent further declines towards the trough of 15.91 from August 1 and 76.4% Fibo of 15.55.

Alternatively, a more decisive push from buyers would be needed to overcome the immediate resistance obstacles coming from the 17.11 to 17.45 region. Those being the restrictive trendline joined by the 50-day SMA, the fresh high of 17.29 and the 100-day SMA. Conquering these, the 38.2% Fibo could be next to deter the climb for the 18.21 high of November 4 and nearby 23.6% Fibo of 18.37.

Overall, the short-term bias is bearish below the restrictive trendline and the 17.29 high. Moreover, a breach below 16.51 would reinforce belief in the decline, while a break below 16.32 would cement it.

commodities silver

Legal disclaimer: The material does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instruments. XM accepts no responsibility for any use that may be made of these comments and for any consequences resulting in it. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. The research and analysis does not involve any specific investment objectives, financial situation and needs of any specific person who may receive it.

It has not been prepared in accordance with legal requirements designed to promote the independence of research, and as such it is considered to be marketing communication. Although we are not specifically constrained from dealing ahead of the publication of our research, we do not seek to take advantage of it before we provide it to our clients. We aim to establish, maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. We operate a policy of independence, which requires our employees to act in our clients’ best interests and to disregard any conflicts of interest in providing our services.

CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losing all of your invested capital, so please make sure that you fully understand the risks involved.