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Silver D1(Daily) Chart Analysis – Extreme Divergence, Parabolic Sar
On the daily chart, we had a strong bullish rally and the price which was moving higher has created an extreme divergence based on the moving averages of the MACD indicator and is currently moving lower. It looks like a correction is happening now and while measuring this bullish rally using the fibonacci retracement tool, we could see that the price still has room lower towards the strong support zone formed by the 38.2%(22.872) – 50%(20.724) fibonacci retracment zones. Also, there are no signs of trend change in play yet, in addition to this based on the Parabolic Sar the dots are above the price which we may consider as evidence of bearish pressure. We may now move down to one timeframe lower and see if we can find evidences supporting this short term bearish view.
Silver H4(4 Hours) Chart Analysis – Uptrend Line Breakout, Parabolic Sar, ADX Indicator
On the H4 chart after the strong bearish move to the downside, we had a deeper correction in the form of an ABCD pattern and then the price which is moving lower has broken below the most recent uptrend line. Also, we had a strong support zone and the price which is moving lower has broken below this strong support zone as well and is holding below it. We may consider these as evidences of bearish pressure. Also based on the Parabolic Sar the dots are above the price here as well and there are no signs of trend change. In addition to this, the ADX indicator gave a bearish signal at the cross of -DI (red line) versus +DI (green line), and the main signal line (silver line) reads value over 25, we may consider this as yet another evidence of bearish pressure. So until the strong resistance zone shown in the screenshot below holds my short term view remains bearish here and I expect the price to continue lower further.
(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” here)
Technical Analysis & Forecast Summary
Silver D1(Daily) Chart Analysis
- Extreme Divergence, Parabolic Sar
Silver H4(4 Hours) Chart Analysis
- Uptrend Line Breakout, Parabolic Sar, ADX Indicator
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