Technical outlook:
Silver prices dropped through the $21.70 mark on Monday before finding support. The metal is seen to be trading close to the $22.00 handle at this point in writing and is expected to stage a rally through $24.50 levels in the next few trading sessions. Bulls will remain poised to hold prices above the $21.70 lows to keep the structure intact for now.
Silver seems to be carving a more complex corrective structure than Gold as discussed on Monday. The pattern could be an expanded flat, which is a 3-3-5 structure, and the last five waves could be unfolding towards $24.50. Once the corrective rally is over, the metal would resume its downtrend towards $20.00 and further.
Silver would face strong resistance around the $24.40-50 zone, which is the Fibonacci 0.618 retracement of its recent downswing between $26.20 and $22.12 respectively. Furthermore, it is also the past support-turned-resistance zone and a potential reversal zone. Traders will be watchful for a bearish reversal around $24.50.
Trading plan:
Potential rally towards $24.50 against $21.00
Good luck!
