Silver is edging lower today, a continuation of last week’s downleg. The recent double top pattern seems to be encouraging this move lower after the break of its neckline at 24.48 on May 11. With this pattern’s target being at around 22.9, the bears could remain confident.
In the meantime, the overall technical picture remains bearish. The Average Directional Movement Index (ADX) is edging higher, confirming the presence of a muted bearish trend in silver, and the RSI has sunk below its 50-threshold. The stochastic oscillator is scraping the bottom of its oversold area and, considering the wider environment, it can stay there for a while.
Amidst this environment, the bears appear to be targeting the 23.34 level populated by the 61.8% Fibonacci retracement of March 8, 2022 – September 1, 2022 downtrend and the 100-day simple moving average (SMA). Should they manage to break this level, they would then come up against the busy 22.21-22.58 area. This range is defined by the June 6, 2022 high and the 50% Fibonacci retracement, and could prove to be a real test of bears’ resolve.
On the other hand, the bulls should not despair. A successful battle for the key 23.34 level would potentially help them build some momentum as they set their eyes on the March 31, 2021 low at 23.76. Higher, the 24.10 and 24.53 levels respectively would be critical for the fate of the current short-term bearish trend.
To conclude, silver bears have been staging an impressive decline since the early May highs. The overall technical picture is still favouring them, but the bulls appear ready for a comeback if 23.34 is not broken convincingly.