Silver Technical analysis, 22nd September 2016. Silver price gained recently and broke a major resistance area. It looks like the price may gain further traction in the near term.
- Silver buyers managed to gain strength recently and pushed the price higher versus the US Dollar.
- There was a break above a resistance trend line on the 4-hours chart of XAG/USD.
- If the highlighted break is true, there are chances of more upsides towards $20.00.
Silver Price Technical Analysis
The silver metal continued to trade in a range versus the US Dollar for some time around the $19.00 handle. Finally, the Silver buyers stepped in and gained momentum. As a result, there was a move above the $19.20 resistance.
Moreover, during the upside move, the XAG/USD pair broke a couple of important hurdles. First, there was a bearish trend line on the 4-hours chart. Second, the silver price managed to settle above the 100 simple moving average.
Lastly, the price also closed above the 50% Fibonacci retracement level of the last drop from the $20.12 high to $18.65 low. Currently, the price is trading near the 61.8% Fibonacci retracement level of the last drop from the $20.12 high to $18.65 low. However, silver price remains in an uptrend and likely to test the $20.00 handle.
Trade Idea – Buying dips near the 100 simple moving average (H4 chart) may be considered with a stop below it.
This week, the US saw the release of the Housing Starts by the US Census Bureau, at the Department of Commerce. The market was expecting 1.190M in August 2016, but it came in at 1.142M.
The report added that “Privately-owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 1,139,000. This is 0.4 percent (±1.6%)* below the revised July rate of 1,144,000 and is 2.3 percent (±1.5%) below the August 2015 estimate of 1,166,000”.
The US Dollar was under pressure this week, and it was more due the fed interest rate decision lined up later today. So, investors and traders need to be prepared for this much-awaited event and plan trades accordingly.
Trade safe traders!