Technical outlook:
Silver prices dropped through the $20.45 lows on Friday before finding interim support. The metal has refrained from printing any further low on Monday as its counterpart Gold. It could be seen as a potential divergence and the trend reversal scenario in the near term. Bulls will be inclined to hold prices above $20.45, keeping the structure intact.
Silver has been in a downtrend since the $30.08 high and it has carved a series of lower lows and lower highs as seen on the chart presented. The metal has carved a meaningful downswing between $26.22 and $20.45 and would be now working to retrace the same. Please note that the Fibonacci 0.618 retracement of the above drop is now seen through $24.00.
Furthermore, the past support-turned-resistance is seen at $24.30. A high probability remains for the downtrend to resume if prices manage to reach the above $24.00-30 zone going forward. Ideally, any pullback should stay below the $26.20 resistance as bears prepare to come back in control.
Trading plan:
Potential rally through the $24.00-30 area against $20.45
Good luck!
