- Silver prices bounce back after seven-week decline
- Momentum oscillators around their neutral levels
- Break either above 24.60 or below 21.90 would signal direction
Silver prices have risen over the last week, breaking above a downtrend line to recover a small chunk of the losses from the selloff that started in early December. That said, the structure of lower highs and lower lows is still in force and the market is also trading below its key moving averages, which suggests that the outlook remains cautiously negative.
Momentum oscillators are near their neutral levels, providing no indications about what comes next. The RSI has flattened close to its 50 line, and while the MACD is above its red trigger line, it’s still in negative territory.
If buyers remain in control and pierce above the 23.25 level, an even bigger battle would probably wait for them slightly higher at 23.55, which is roughly where the 50- and 200-day simple moving averages (SMAs) have converged. Another successful break could open the door towards the 24.60 zone, defined by the top in late December.
On the downside, sellers would need to penetrate below the 22.50 region, and even more importantly below the latest low of 21.90, to signal a resumption of the recent downtrend.
All told, the recovery in silver prices is unconvincing so far. A new high above 24.60 could change that, while in contrast, a clean break below 21.90 would signal further losses.
