Hi Traders! Silver forecast and technical analysis post is here. In Silver, based on the multi-timeframe analysis method, we are going to look for the evidences on three timeframes that is on the current trading timeframe and two timeframes higher, when we get evidences that support our view on these three timeframes this makes the setup very reliable. We do our analysis on the MetaTrader4 platform (MT4), some very interesting, useful tips and hacks about the MT4 platform could be found here. If you would like to learn more about the way we trade and the technical analysis we use then check out the Traders Academy Club Spoiler alert – free memberships are available! Let’s start our analysis now from the highest timeframe which will be the weekly chart here.
On the weekly chart, the price was moving inside a range which started on 31st January 2021. This range is formed by the highs and lows reaching parallel support and resistance zones. The price which was respecting this range so far has currently broken above the top of this range, we may consider this as evidence of bullish pressure. Also, we could see that the price which is moving higher has created higher highs based on the MACD indicator, which is a sign of gaining momentum towards the bullish side. In addition to this, the ADX indicator gave a bullish signal here at the cross of +DI (green line) versus -DI (red line) and the main signal line (silver line) reads value over 25, we may consider this as yet another evidence of bullish pressure. So everything looks good here for the bulls and we may now move down to lower timeframe and look for evidences supporting this bullish view.
On the daily chart, the price which was moving higher has created a bullish trend pattern in the form of three higher highs, higher lows, we may consider this as evidence of bullish pressure. Generally, after a bullish trend pattern, we may expect corrections and then potential continuation higher. Currently it looks like a correction is happening. So basically, I expect the price to move higher further after this correction. In addition to this, we could see that the price which was moving higher has created higher highs here as well based on the MACD indicator, which is a sign of gaining momentum towards the bullish side. Also, there are no signs opposing this bullish view. So the bottom line here is that the daily chart has evidences supporting this bullish view. We may now move down to one more timeframe lower and look for evidences supporting this bullish view.
On the H4 chart, currently it looks like a correction has happened in the form of double wave to the downside. Also, while measuring the first wave of this correction we have two key support zones that has formed. The first key support zone is formed by the 61.8%(24.311) Fibonacci expansion level of the first wave and the second key support zone is formed by the 100%(23.365) Fibonacci expansion level of the first wave. The price which was moving lower reached the first key support zone, respected it and bounced higher from this zone. Also, we could see that the price which was moving lower created a bullish divergence that has formed between the first low that has formed at 24.456 and the second low that has formed at 23.961 based on the MACD indicator, which we may consider as evidence of bullish pressure. In addition to this, the ADX indicator gave a bullish signal here as well at the cross of +DI (green line) versus -DI (red line) and the main signal line (silver line) reads value over 25, we may consider this as yet another evidence of bullish pressure. Until the two key support zones hold my view remains bullish here. If we get a valid breakout above the downtrend line shown in the image below (marked in red) we may then consider it as a validation for the bullish view.
Silver W1(Weekly) Chart Analysis
Silver D1(Daily) Chart Analysis
Silver H4(4 Hours) Chart Analysis
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this buy setup then you can use any setup and strategy that you have in your arsenal to look for bullish moves and join this buy trade.
Also, don’t forget to protect your buy trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team.
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