Silver Price Forecast: $74.70 Holds as RSI Near 80 Signals Next Move
Silver (XAG/USD) is trading close to $74.70 on the 4hr chart, extending a pretty impressive rally that started somewhere around the $65-66.
Quick overview
- Silver (XAG/USD) is currently trading around $74.70, continuing a strong rally from earlier this month around $65-66.
- The price action remains above key moving averages, indicating solid support for bulls and a healthy consolidation phase.
- Resistance levels to watch are $75.40 and $76.90, while support is found at $74.25 and $71.85.
- Despite a stretched RSI around 80, there are no signs of bearish divergence, suggesting continued buying interest.
Silver (XAG/USD) is trading close to $74.70 on the 4hr chart, extending a pretty impressive rally that started somewhere around the $65-66 mark earlier this month. The advance is being driven by some really strong bullish candles, with only a couple of shallow pullbacks in between, which is a classic sign of solid buying power rather than late-stage speculation. Sellers, however, have had a tough time forcing any meaningful retracements – which is good news for the bulls – suggesting the overall trend is still intact.
The price action is still respecting a rising trendline drawn from those lows in the middle of the month, which keeps the overall structure looking solid. Rather than showing any signs of exhaustion, silver is consolidating gains, which is a pretty healthy pause after a pretty sharp upside run.
Key Levels Define the Technical Structure
When it comes to moving averages, silver is pretty well supported. Price is still trading above the 50-period EMA near $68.10 and comfortably above the 100-period EMA around $64.45, which is good news for the bulls. These levels have acted as a safety net in the past during silver pullbacks and continue to attract buyers when the price dips.
The current consolidation is forming just below $75.40, a level that aligns with a prior Fibonacci extension from the latest swing up. This zone has capped any upside attempts so far, but the sell side is being orderly rather than aggressive.
[[XAG/USD-graph]]
Levels to keep an eye on;
- Resistance: $75.40 and then $76.90
- Support: $74.25 followed by $71.85
- Trend support: Rising trendline from those mid-month lows
The fact that there is a confluence of support and trendline near $71.85 makes it an even more important level to watch if we do get a deeper pullback.
RSI Signals Stretch, Not Reversal
The momentum indicators are showing a pretty stretched market, with the RSI hanging around 80. But the good news is that we’re not seeing any signs of bearish divergence, which suggests the buyers aren’t getting out just yet.
Historically, markets like this one resolve themselves through a bit of sideways movement rather than a sharp price drop. A brief pause or a shallow retracement would help to reset the momentum and possibly set the stage for another upside attempt.
Silver (XAG/USD) Short Term Trading Outlook
As long as silver holds up above that key trend support, we’ve got a pretty constructive bias. If we do get a pullback, though, it’s only likely to attract some buying interest unless the price decisively breaks below $70.
Trade idea: Look to buy dips near $72.70 with a stop just below $70.00 and a target of $76.90.
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