Confluence increases potential importance
Note that before the rise above the trendline last Wednesday, Silver successfully tested resistance on the trendline for three consecutive days. When the bull breakout day came, the associated resistance zone was marked by the confluence of several indicators. The Uptrend Line, the 50-day MA line and the 20-day MA marked the price resistance zone from around $32.49 to $32.53.
The bull breakout on Wednesday was further confirmed by daily closures above the resistance zone that day, and on Thursday, when the day ended in that support zone. However, on both Wednesday and Thursday, silver trades up and down the support zone. There are changes that may have happened today.
Resistance is a support
Today, bullish continuing signals were generated at rallies above Thursday’s high, with support seen in the 20-day MA. So today is the first day that the day range exceeded the support expressed in a 20-day line. This behavior indicates a potential progression of the upward trend as advance resistance was successfully tested as support in 20 days of MA. The same cannot be said yet for the 50-day MA, but the current silver plans to close its 50-day line for the second time since Wednesday’s breakout.
The strength remains, but it may disappear
Today’s 20-day successful MA tests are only valid if you continue to show future support. At the same time, silver will be extended after a sharp $4.80 or 17% meeting in just seven days. This day may end with Silver forming a bearish shooting star candle leg pattern for key support. So the critical drop below today’s $32.43 low triggered a reversal candle, and the risk of a deeper bearish pullback puts silver as support failed in the 20-day MA.
To see all of today’s economic events, Economic calendar.
