While gold seems to have resumed its rally, silver is still struggling to attract buyers during its ongoing pullback.
Could it be in for a reversal soon?
Better keep your eyes peeled for reversal candlesticks around these nearby inflection points:
Silver (XAG/USD) 4-hour Forex Chart by TradingView
Profit-taking off earlier safe-haven plays forced silver to retreat from its latest highs near R1 ($34.98) down to the 50% Fibonacci retracement level near S1 ($30.23) and the 100 SMA dynamic inflection point.
Its fellow precious metal, gold, has already been able to bounce thanks to safe-haven flows spurred by worsening geopolitical tensions between Russia and Ukraine, but it looks like XAG/USD is still stalling.
Are silver bulls about to charge anytime soon?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on silver and market sentiment, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
The 100 SMA is above the 200 SMA to suggest that the rally is more likely to resume than to reverse, but silver traders might still be holding out for a larger correction to the 61.8% Fib closer to a longer-term rising trend line that’s been holding so far this year.
If any of the Fibs are able to keep losses at bay, look out for a continuation of the uptrend to the swing high or to fresh ones at R2 ($37.30).
On the other hand, a break below the key support zone could set off a drop to the next potential floor at S2 ($27.20) or even down to S3 ($25.48) just below the swing low.
As always, watch out for other top-tier catalysts that could impact overall market sentiment, and make sure you practice proper position sizing when taking any trades!
