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The US dollar surged higher recently, and as a result the precious metals such as SILVER and GOLD also took a hit. SILVER traded lower towards the $18.20 support area, and currently trying to recover some ground. The US initial jobless claims data surprised to the downside, but the Philadelphia Fed manufacturing index registered a decline. The US dollar traded a touch lower after the release. SILVER too has managed to gain bids intraday, but it faces a monster resistance on the way up. If it succeeds in clearing the $18.60 level, then there is a chance that it might surge higher in the short term. There is no major economic release in the US today, so the market might be mostly driven by the sentiment.
There is a possibility that SILVER might be forming an inverse head and shoulders pattern on the hourly chart. There is also a bearish trend line, which is sitting right around the neckline of the pattern. Moreover, the 50% fib retracement level of the last move from the $18.88 high to $18.28 and the 100 hourly moving average are also sitting around the mentioned resistance zone. So, if the white metal buyers manage to break the $18.60 level, and close above it, then it might be considered as a bullish sign. In that situation, SILVER might climb towards the 200 moving average.
On the downside, shoulder support is around the $18.40 level. If SIVLER breaks it, then it would invalidate the pattern and call for more loses towards the last low of $18.28.
Overall, buying with a break above the $18.60 might be considered as long as the pattern is valid.
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Posted By IKOFX Technical Team: Online Forex Broker
Website: http://ikofx.com
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