Silver's Consolidation Phase: Anticipating the Next Big Move
07 August 2024
After Monday's decline, Silver has been moving sideways, forming a pennant pattern marked with red lines. This consolidation phase comes with two critical levels to watch. The key horizontal support at 26.1, marked in green, serves as a long-term foundation for Silver. Meanwhile, the mid-term resistance at 27.5, highlighted in orange, is crucial for a potential bullish breakout.
A breakout from the pennant pattern alone won't be sufficient for a strong signal. While an upside breakout might spark some optimism, a confirmed buy signal requires a breach of the orange resistance. Conversely, a downside breakout from the pennant won’t immediately trigger a sell signal since the price remains above the green support. Selling above this support is generally not advisable.
Therefore, traders should wait to see how Silver behaves around the green support. A bounce from this level would be a strong buy signal. However, if Silver breaks below the green horizontal support, it could indicate a robust sell signal. The direction chosen at these critical levels will determine Silver's next significant move.