On the daily chart the pair found strong support near the 50 DAY M/A (green line) and has rallied 3 days in a row since then. Today’s session should be interesting because the price action is near the 1.4731 resistance line for the third time since December 18. A close above this line, which means a 4 years high, will confirm the next leg up with new target at 1.5184, but if it fails again it will be a devastating fall to the 50 and 100 moving average.
|Support||1.4500||1.4444 (50 M/A)||1.4239 (100 M/A)|
Since November 14th the pair rally more than 10% in 3 month with first 2% correction to this rally last week. On the 4h chart we see a “Flag formation" that should drive the next move today or tomorrow. A breakthrough to the upside will trigger the next leg up with first target at 174.84 and new long term target at 179.63. A break to the down side will send the pair to retest the 170.86 and 169.82 support lines.
For more than a month the silver continues trading around the $1 range, and after 30% fall in 2013 this consolidation is a positive sign to the bulls. On the 4h chart any touch on the upper resistance line or lower support line proves to be a reliable signal for reverse price action. On the long term a break of this range will trigger the leg with targets around 21.5 to the upside or new lows at 17.5 to the downside.