During the past month, silver prices climbed steadily and spot-silver peaked at $34.30. However, the commodity then entered a moderate bearish correction, which took it down to $31.70 an ounce. Currently, silver has stabilized around the $32.70 level. Nevertheless, technical analysis now suggests that another bearish correction might be in place, with potential to take silver as low as $31.50 an ounce.
• The chart below is the spot-silver 4-hour chart by ForexYard.
• There is a very distinct bullish channel which was formed on January 30th, and ended around February 13th. During this time, silver climbed from $26.35 to the $30.85 level.
• Afterwards, silver entered an even sharper bullish channel, which only ended on February 20. By then, silver reached as high as the $34.30 level.
• Later on silver saw flat trading around the $33.50 level, and then began trading within a restricted range between the $31.70 and the $33.00 level.
• Currently, silver is trading near $32.80 an ounce, and appears to be on its way towards the bottom of the range.
• The MACD has recently completed a bearish cross, at a very high level. This indicates that the bearish move is likely to continue.
• Silver began to fall once the RSI fell below the 70-line. The RSI continues to point downwards, also signaling that the bearish move may be extended.
• The next support levels are located at the $32.00, $31.70 and $31.50 levels.
• The next resistance levels are at: $33.10, $33.75 and $34.25.