Hi Traders! Silver short term forecast update and follow up is here. On August 3rd I shared this “Silver Short Term 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, we have a bullish divergence that has formed between the first low that has formed at 24.749 and the second low that has formed at 24.483 based on the MACD indicator. Then the price moved higher and broke above the high at 25.465 creating higher highs, thus forming a classical setup of bullish divergence followed by bullish convergence. Hence as per the book scenario, after a bullish convergence, we may look for corrections to happen and then further continuation to the upside. Currently it looks like a flat correction is happening in the form of a range. Until the key support zone shown in the image below holds my short term view remains bullish here. If we get a valid breakout above the top of this range we may then consider it as a validation for this short term bullish view and may expect the price to move higher further.
Silver H4(4 Hours) Chart Current Scenario
In Silver, I mentioned that “if we get a valid breakout above the top of this range we may then consider it as a validation for this short term bullish view and may expect the price to move higher further”. On the H4 chart, the price action followed my analysis exactly as I expected it to. Generally after a bullish convergence, we may expect corrections to happen and then further continuation to the upside. This correction happened in the form of a range here. The validation for the short term bullish view which is a valid breakout above the top of this range happened as I expected it to. The price then moved higher further and provided a nice move to the upside until it was blocked by a bearish divergence.
You can see this move clearly on the M15 chart below. We could see that the price broke above the top of the H4 range and then we had a pullback with the price retesting this breakout and then it moved higher further. We may consider this as a fact provided by the market supporting the bullish view and also there were no signs opposing this bullish view. Then as you can see in the image below how the price moved higher further 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 short term forecast is a perfect example of this scenario.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team.
