Taking the Second Short in Silver Today
Skerdian Meta • 2 min read
Silver turned bearish in June, although most of the decline came this month, as safe haven assets took a dive on the growing global economy. Gold tumbled around $150 at the end of the second week of August, while Silver dived around $3.50 after breaking below the 50 weekly SMA.
On the H4 chart, XAG/USD reversed at the 200 SMA (purple) and even opened with a gap lower, which shows the selling pressure has been quite strong. Although gold has been crawling higher this week, which is not a good sign for sellers, silver is keeping the bearish bias nonetheless. From the rumours that are going around, the dive in GOLD on Monday was an insider trading event, which went against all logic.
The 20 SMA is pushing silver lower on the H4 chart
On Wednesday, we saw a consolidation and decided to open a sell SILVER signal once the 20 SMA (gray) caught up with the price. Silver tumbled lower, with the 20 SMA pushing it down, although it retraced higher earlier today, which is presenting us with another buying opportunity.
The 100 SMA is providing resistance for silver on the H1 chart
On the H1 chart above, we see that silver has been making lower highs after the crash, but it is also hitting lower lows, indicating that the pressure remains to the downside, despite the climb in gold. Today we are seeing a retrace higher, but it seems quite weak and the 100 SMA (green) is providing resistance at the top.
So, we decided to open a sell forex signal in silver right at the 100 SMA. The stochastic indicator is overbought on this time-frame, which points to a reversal down, but it will take some time, since the price action in silver has been really slow. Safe havens are benefiting from the spread of the Delta coronavirus variant, but the USD has also been resilient, so it’s a tough battle here for silver. We are short on silver now, hoping that it will resume the decline again soon.