Silver has fired off a Bearish Engulfing Bar x Inside Bar Combo on the daily price action chart. This combo setup is rejecting the major daily resistance with the zoomed out daily chart below showing how important this key resistance has been in recent times with price clearly respecting it on many occasions.
Price was being contained above this level as it held as a support level, but as price wound up coiling like a spring, it eventually burst lower with the recent strong momentum lower to form the Bearish Engulfing Bar (BEEB). The high of the Bearish Engulfing Bar made a re-test of the old support level and the level held as price flip level and new resistance.
Price has now formed the Inside Bar (IB) with the high lower than the engulfing bars high and the low, higher than the engulfing bars low. This could be a signal that price is making a pause before getting ready to continue with it’s next move in the direction of the recent trend and in the direction of the bearish engulfing bar.
If price can break the engulfing bar x inside bar combo’s lows, the near term support level comes in around the 19.23 area and if price can gain momentum and break this support, the next major support is around the June swing lows. This market has been in a strong move lower of late, but if price does move back higher it could move back into sideways trading price action. This market has been trading sideways for most of the year which is something traders should watch out for if price does rotate back higher.
Silver Daily Chart
Silver Daily Chart Zoomed Out
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