Silver extended its pullback from the 17.1 peak for the second time with further bearish acceleration coming from the fresh strength of dollar on the better-than-expected US data. The renewed risk on mode that reduced demand puts the XAU/USD price under increased pressure.
Today’s action broke below important supports at 17.1 of the four-hour chart and met the next target at 16.97 where temporary footstep was found.
Fresh bears may continue further here as near term studies are overbought, but a limited upside action could be expected, as strong bearish signals appear on stochastic which reversed from the overbought zone, suggesting further downside.
The momentum indicators have all now taken on a corrective outlook, with the Stochastic falling below 80 and the lines having crossed lower. The pair is now back into the old pivot band 17.1, so it will be interesting to see the market’s reaction. The likelihood is that the 17.1 support which has been broken is looking for a retest of the retracement of 17.14 which has often been seen as an inflection point. The four hourly chart shows the resistance at 17.14 is bolstered now as a key level.
Silver price achieved a strong break of the 17.1 level and settled below it, to turn its intraday track downwards, targeting a test of 16.80 areas in the upcoming period, supported by the negative pressure formed.
Therefore, the bearish bias will be suggested in the upcoming sessions unless the price managed to rally bullishly to breach 17.1 followed by 16.97 levels and hold above them.
Expected trading range for today is between support 16.80 and 17.14 resistance.
Expected trend for today: Bearish
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This article was originally posted on FX Empire