Technical outlook:
Silver prices continued to slip on Tuesday towards $21.75 intraday, after completing an Engulfing Bearish candlestick pattern on Monday. The metal might have carved interim lows close to $21.75 and could be looking to pull back before resuming lower towards $21.30 going forward. Bears would be poised to hold prices below $22.44 in the near term.
Silver is carving a counter-trend rally since the $20.45 lows and might have terminated its first leg around $22.44. The second wave is underway towards $21.30, which is also the Fibonacci 0.618 retracement of the first leg. If the above is correct, prices would produce a sharp rally towards $24.00-20 in the next few trading sessions.
Silver has carved a larger degree recent downswing between $26.22 and $20.45. Since then, the price has been retracing like the counter-trend rally described above. Also, note that the Fibonacci 0.618 retracement of the above drop is seen passing through $24.00. Hence, the odds are that the price will give a bearish reaction.
Trading plan:
Potential rally through $24.00-20 against $20.00
Good luck!
