Below looks at the pattern of Silver on a monthly basis, back to the 1970’s. Since the 2011 high in Silver, it has created a series of lower highs and lower lows.
An important cluster is in play for Silver, where it has the potential to “Back Off” a good bit!
(Click on image to enlarge)
The rally that has taken place this year, due to lower highs and lower lows, has to be considered a counter trend rally, until falling resistance is taken out. Silver hit a cluster of resistance (4 lines) and its Fibonacci retracement level at (1). Since hitting this cluster, Silver has been soft of late.
Now Silver is testing a key support line at (2).
If Silver would break this support, it could attract sellers and the price could “Back Off” a good deal. What happens at this support test looks to be very important for the price of Silver and the metals space going forward.
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