FX.co ★ Silver analysis for January 23, 2013

Silver Elliott Wave
Since our last analysis silver has traded upward, corrective (C) wave (coloured green) of the bigger (4) wave (coloured red) has finished its development. Yesterday during the European session we could observe ascending movement from 31.80 toward 32.35 level and we can consider this move as the end of the corrective (4) wave (coloured red). Therefore, during the New York session this commodity did not manage to hold this level and the price pushed slightly lower reaching a 32.12. At the moment silver is trading around 32.20 level and we expect to see big drop very soon. In accordance with our wave rules and taking into account that wave E should retrace 61.8% of wave C, we can define the potential targets with measuring wave C with take profit at 28.35 (61.8% of wave C). To reduce the risk, we can use invalidation at 32.51 level as stop loss.

Support and Resistance
(S3) 31.345 (S2) 31.580 (S1) 31.895 (PP) 32.130 (R1) 32.445 (R2) 32.680 (R3) 32.995

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at level 32.00 with stop loss 32.51 and take profit at 28.33 are recommended.