Hi Traders! Silver forecast update and follow up is here. On March 30th I shared this “Silver Forecast And Technical Analysis” post in our blog. In this post, let’s do a recap of this setup and see how it has developed now. 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!
My Idea
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 H4(4 Hours) Chart Current Scenario
Based on the above-mentioned analysis my view was bullish here and I was expecting the price to move higher further until the two key support zones hold. Also, I mentioned that “If we get a valid breakout above the most recent downtrend line we may then consider it as a validation for this bullish view and may expect the price to move higher further”. The price action followed my analysis exactly as I expected it to here. The price which was moving lower reached the first key support zone, respected it and bounced higher from this zone. Also, the validation for the bullish view which is a valid breakout above the downtrend line happened as I expected it to, which we may consider as a fact provided by the market supporting the bullish view. Also, there were no signs opposing this bullish view. The price then moved higher further and delivered a nice move to the upside so far!
(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” here)
On the M15 chart, the market provided us with various facts supporting the bullish view. After the breakout above the H4 downtrend line, we had a pullback on the M15 chart with the price creating a bullish hidden divergence between the first low that has formed at 24.658 and the second low that has formed at 24.878 based on the MACD indicator. We may consider these as facts provided by the market supporting the bullish view. Also, there were no signs opposing this bullish view. Then as you can see in the image below how the price moved higher after that and provided a nice move to the upside.
So traders, when it comes to trading, there are various important factors that we need to pay attention to, just because we have a good setup doesn’t mean that we can enter the trade randomly and it will pay us huge profits. First of all, we need to validate the entry and we should have a perfect entry plan to get into the trade which is a key factor when it comes to trading. This Silver forecast is yet another good example of this scenario.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team
