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Silver – Another failed breakout?

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Or more to come?

Are we about to see silver break out of the descending channel and bring an end to months of a downtrend?

The charts suggest we probably aren’t. Silver has rallied over the last week or so but today it’s run into significant resistance near the upper end of the descending channel and the long upper wick suggests it’s been strongly rejected.

This fell just shy of the 55-day SMA , the lower end of the 55/89 band, which has been resistance since breaking below back in June.

Similarly, this resistance was found around the 200/233-period SMA band on the 4-hour chart which, barring a brief moment earlier this month, has been a solid ceiling, also since June.

Should it break above here, it could be a very bullish signal. But the early signs aren’t promising which may suggest the path of least resistance remains below.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
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