Technical outlook:
Silver prices rose through the $22.20 high on Monday before pulling back. The metal has taken out resistance at $22.08. Besides, bears remain poised to take control for the short term. We expect a corrective drop through the $21.20-30 levels in the next few trading sessions before the counter-trend rally resumes again.
Silver has already carved a meaningful downswing between $26.22 and $20.45 in the past few trading sessions as seen on 4H chart. Prices have been retracing since then. Projected upside targets are $22.50-60 and up to the $24.00-10 levels respectively. Also, note that the Fibonacci 0.618 retracement of the above downswing is passing close to $24.00.
Alternatively, a slip below $20.45 could drag the price further towards $20.20 and $19.20 before finding support again. For now, the probability of the counter-trend rally unfolding higher toward $24.00 remains. The bottom line is that prices should stay above $20.45 going forward as traders prepare to hold long positions for now.
Trading plan:
Potential rally through $24.00 against $20.00
Good luck!
