Silver is trading around $70, with traders still in a narrowing trading range after last week’s support bounce.
XAG/USD tested the lows very recently, but the price action is yet to surpass the resistance lines to validate a firm rally.
Price action has been narrowing after some high-volatility sessions. Buyers have been able to hold up the lower trendline, and multiple attempts to break above the upper trendline demonstrate ongoing selling pressure from short-term buyers.
Silver Forms Tight Triangle Near $70
Intraday chart shared by Kerem Katipoğlu indicates that the price of silver is trading within a symmetrical triangle. A compressed structure has formed below a descending resistance line with higher lows at $69.50 and $70.50.
This is a trend that indicates a lack of volatility and the market’s desire for a break in direction. Price has been oscillating between the extremes but has recently been moving closer to the middle.
If the price is moving above the upper trendlines, then the recent high around $71 is in focus. The next resistance would be at $73.09, which is a level that was found on the 4-hour chart.
But if it trades through this rising lower trendline, the short-term recovery will be in jeopardy. The upswing may draw interest to the upper part of the $60’s before the market re-tests lower levels.
Resistance Builds Between $73 and $79
The first major support level was a target in the Economic Office chart at $73.09. The chart can see a possible bounce from the $69.82 level and into this zone before the next significant move into a new direction becomes apparent.
The next obstacle is approximately $78.82. This zone was a support and resistance level, making it a better sell zone if silver bounces off.
According to the analyst chart, the level of $83.05 looks like a high resistance level, though this would have to be overcome in the range of $73 to $79 first. Still, the four-hour time frame is lower on the highs than the May peak, maintaining the larger corrective pattern.
The first bearish scenario the analyst has in mind is $62 on the rebound into resistance and then losing momentum. That is near the lowest level of the entire descending formation and the June low.
Daily Indicators Remain Weak
On the other hand, the daily time frame indicates that silver is below two significant moving averages and is trading around $74.20. This area also coincides with a visible volume shelf, which further accentuates it as a significant resistance zone.
As per the X chart, Candlestick trading has also become less conclusive in recent times. The bullish candle formed near the support level was followed by a silver shooting star, a doji, and a small bearish candle.
This run illustrates the tendency to see buyers grab the first rebound and fade on follow-through when prices reach overhead supply.
RSI was around 41, which is below the neutral level of 50. But the MACD stayed below the zero line, indicating that the market is still in a seller’s market, at least on a bigger time frame.
Silver is currently trading between the support level of $69 and the resistance of $73.09. If the price breaks out from this triangle formation in the intraday time frame, it will be a key breakout point to see whether the price challenges the $74 volume zone or heads back towards the June support area around $62.