Gold and Silver have been bullish in 2015, part of a shift in trend that began around Nov. 2014. Let’s take a look at the charts to assess where these rallies might go to.
Double Bottom: The 4H gold chart shows a double bottom that formed at the turn of the year. Last week, price broke above the double bottom consolidated, and ended the week with a confirmation of the breakout. At least in the 4H chart, we can see a market developing a bullish market.
1200: If there is a pull back at this point, 1200 will be a key area to monitor for support. If it holds, the bullish outlook remains, but if price falls back below 1200, the bearish outlook could be back in play.
Key Resistance Levels: The daily chart shows the key resistance levels coming up against the current rally. 1255 will be a key resistance pivot along with the 100-day SMA. Above that the area around 1275 will be resistance due to a falling trendline and a support/resistance pivot area. If we see the RSI stall above 70 and price stall around 1275, we should get ready for a bearish swing.
Bullish Breakout: Silver has also been bullish in 2015 after a consolidation at the turn of the year. Last week, price broke above the consolidation range, tested the range as support and continued to rally.
We are seeing some near-term pullback from 17.20 back to 16.60, but this is still within the context of a bullish market. As long as price can hold above 16.15 and the 4H RSI above 40, we are in a bullish market in the short-term. In fact, there is a support area around 16.50 during the 1/14 US session.
Resistance: When we look at the longer-term chart, we can see that silver is in a bearish market but in a medium-term consolidation that has a short-term bullish outlook.The next key resistance levels will be first around 17.80, and the highs from October. Above that the 18.50-70 area contain the 200-day SMA, and a previous support pivot area from 2013 and 2014. Expect resistance here especially if the daily RSI stalls in the overbought (above 70) area.
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