The daily silver chart shows a strong bullish push in June. You can compare the structure to the one in February (refer to the daily chart below). As silver drifts higher above 21.00, it is testing a falling trendline that connects the Nov. 2013 high of 23.08, with the February and 2014 high at 22.18.
Silver (XAG/USD) Daily Chart, 7/1
(click to enlarge)
The trendline is part of a 6-months-and-running descending triangle. This descending triangle follows a bearish trend in 2013. Therefore, the mode is neutral with a bearish bias. As price tests the triangle resistance, with the daily RSI showing bearish divergence, traders are likely going fade silver back toward the 20 handle if not back toward triangle support and 2014-low at 18.64.
A break above the triangle resistance would first expose the year’s high at 22.18.
When we come down to the 4H chart, we see that momentum is still strong.
Silver (XAG/USD) 4H Chart, 7/1
(click to enlarge
The 4H RSI reading has popped up above 70 and even 80, while holding above 40, even 50 during the pull-downs. This reflects bullish continuation momentum. In fact when the RSI lows are lower while price lows are higher, we have what’s called a Bullish Reversal Signal, coined by RSI guru, Andrew Cardwell. It basically means the bullish momentum might be slowing, but price action remains bullish and is looking for another high.
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Gold (XAU/USD) – Range Breakout and Bullish Consolidation (7/1)