Silver Price Analysis: A break below key support is a bearish development

  • Silver breaks below key support, changing the trend to bearish.
  • The Measured Move that formed has now been completed with a truncated wave C.
  • More downwards are favored towards a target at the low of May 2nd.

The Silver (XAG/USD) It has broken below the key lows at $28.60, reversed the trend and extended its decline.

The precious metal had been rallying in what looked like a Measured Movement (MM) pattern, with wave C extending substantially higher toward a target at $34.50, however, after rallying to a peak at $31.76, Silver capitulated and plummeted.

Silver Daily Chart

Silver’s break below the key support at $28.67 was a significant turning point in terms of the trend and now means that the commodity is likely in a downtrend in both the short and medium term. Since “the trend is your friend”, the odds favor a continuation of this downtrend. The MA that was forming appears to have been completed with a truncated wave C.

The next downside target is at $26.02 (May 2 low), with the 200-day simple moving average (SMA) a bit lower at $25.85 also likely to provide support.

The RSI momentum indicator is not yet oversold, suggesting that Silver has further room to fall.

Source: Fx Street

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