Commodities

Technical Analysis – Silver improves above MAs; broader bias neutral

Posted on December 8, 2020 at 4:03 pm GMT

Anthony Charalambous, XM Investment Research Desk

Silver has stalled its recent propulsion above the simple moving averages (SMAs), as momentum has become muted. The climb from the two-month low of 21.88 appears intact and may receive assistance from the rising 50-period SMA, while the flattening 100- and 200-period SMAs back a more neutral picture.

The short-term oscillators are reflecting mixed signals in directional momentum. The MACD, in the positive region, remains above its horizontal red trigger line, while the RSI is gradually gliding lower in the bullish territory. However, the stochastic oscillator has shifted bearish and is endorsing negative moves in the commodity.

In a negative scenario, initial downside friction may arise from the support band of 24.27-24.40, ahead of the tentative uptrend line drawn from the 21.88 low. Slightly underneath, the neighbouring 200- and 100-period SMAs at 24.05 and 23.83 respectively, could present the next borders hindering moves to the downside. Sinking even deeper, the 50-period SMA at 23.64 and the adjacent key trough of 23.50 may test the decline, before the 23.30 barrier comes into play.

Otherwise, if buyers steer the commodity clearly above the 24.77 border, the price may shoot towards the resistance region of 25.06-25.22. Should the commodity appreciate further, the price may propel towards the seven-week peak, which happens to be in-line with the 26.00 handle.

Summarizing, silver’s improving picture seems to be holding a sturdy stance, while the short-term timeframe remains in a more neutral structure between the boundaries of 21.88 and 26.00.

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.