Silver Carves A Lower High Around $18.50

03 July 2020

Silver has produced an impressive rally since dropping to $11.50 lows in March 2020. It would have been difficult for most traders to perceive such a sharp reversal in a short span of time. We would warn most traders against being too optimistic yet.

Let us look at potential wave counts on the daily chart presented here. The drop between $19.65 and $11.50 has been in 3 waves A-B-C, hence corrective. A 3 wave movement could be a part of a larger correction or indicate beginning of a new trend.

Interestingly, the rally from $11.50 through $18.50 has also been in 3 waves A-B-C, hence corrective until now. If Silver unfolds into 5 waves, then it would confirm an impulse and also the beginning of a new uptrend. Until that happens, it would be too early to become optimistic.

The overall potential wave counts represent a 3-3 wave structure between $19.65 and $18.50, until now. This could be seen as a part of a potential triangle or an ending diagonal, going forward. A triangle is a corrective structure which consists of 5 waves (a-b-c-d-e) and each wave sub dives into 3 waves. While an ending diagonal is a motive wave, which consists of 5 waves (1-2-3-4-5) and each subdividing into 3 waves.

It remains to be seen whether Silver is unfolding into a triangle consolidation or a diagonal bur probabilities are high for a reversal from here against $19.65 levels.

Prepared by
Technical Analysis Team

Disclaimer: This information has been produced by a third party, for general information purposes only, and is not indicative of future results. Abans Global takes no responsibility for its accuracy or completeness. Any opinions expressed do not reflect those of Abans Global. This information does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should seek independent advice before making investment decisions. Reproduction of this information, in whole or in part, is not permitted. Please note: If you are a Professional client, you are not eligible for negative balance protection and you could lose more than your initial deposit.

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