Analyzing Silver's Correction Stage and Bearish Potential
20 June 2024
From a technical perspective, exciting developments are unfolding with silver, which has been trading technically in the long term. The price is supported by a blue uptrend line, and in mid-June, it bounced off this support, leading to a notable upswing. Since the end of May, silver has been in a correction stage, forming a flag pattern marked by red lines. Additionally, another key support level is the yellow area, which also acted as support in mid-June, along with the blue uptrend line.
Currently, after bouncing from these supports, the price is testing the upper boundary of the flag pattern and showing a bearish reaction. The H4 candle has formed a shooting star, suggesting a potential short-selling opportunity and hinting at a larger drop. This setup indicates a higher probability of movement towards the blue uptrend line rather than a bullish breakout.
Traders should monitor this setup closely, as the bearish bounce from the flag’s upper boundary could lead to a significant decline. The technical indicators favor a move towards the established blue uptrend line, underscoring the importance of these support and resistance levels in silver's price action.