Silver Price Analysis: Reaches new high for May but pulls back after becoming overbought

Source Fxstreet
May 15, 2024 14:22
  • Silver price has risen to a new high for May following the release of US data. 
  • Silver has become overbought on the 4-hour chart and is in the process of pulling back. 
  • It could correct lower but the overall uptrend suggests it will recover and continue pushing higher. 

Silver (XAG/USD) price has risen up to a new high for May at $29.20 after the release of market-moving data from the US. 

Silver is in a short-term uptrend but it has become overbought according to the Relative Strength Index (RSI) momentum indicator. The RSI is also diverging bearishly with price. 

4-hour Chart 

A bearish divergence occurs when price rallies to a new high but RSI does not follow suit as happened between May 10 and May 15. It is a bearish sign. 

Price is pulling back on the current bar and looks like it might be forming a bearish Shooting Star Japanese candlestick pattern. If such a pattern is confirmed on close and it is followed by another bearish bar the Shooting Star will gain relevance and denote a short-term reversal lower.  

When taken together with the indications from the RSI, it could be indicating Silver is about to undergo a correction – much depends on how the current and next bars develop. 

Eventually the short-term uptrend should reassert itself, however, and Silver price rally higher. A break above the day’s high at $29.20 could give added confirmation of more upside to the next resistance level at circa $30.00.

A decisive break below $27.97 would bring the short-term uptrend into question. 

A decisive break would be one accompanied by a long red candlestick that closed near its lows or three red candlesticks in a row. 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Gold price seems vulnerable, traders keenly await US CPI and FOMC policy decisionGold price (XAU/USD) showed some resilience below the $2,300 mark and posted modest gains for the second straight day on Tuesday.
Source  Fxstreet
Gold price (XAU/USD) showed some resilience below the $2,300 mark and posted modest gains for the second straight day on Tuesday.
placeholder
Gold price seems vulnerable ahead of US CPI and FOMC decision on WednesdayGold price (XAU/USD) gained some positive traction on the first day of a new week and reversed a part of Friday's post-NFP slump to the $2,287-2,286 area, or over a one-month low.
Source  Fxstreet
Gold price (XAU/USD) gained some positive traction on the first day of a new week and reversed a part of Friday's post-NFP slump to the $2,287-2,286 area, or over a one-month low.
placeholder
WTI drops below $74.00 as OPEC+ plans to ease Oil production cutsWest Texas Intermediate (WTI) Oil price continues to decline for the fifth consecutive day, trading around $73.90 per barrel during the Asian session on Tuesday.
Source  Fxstreet
West Texas Intermediate (WTI) Oil price continues to decline for the fifth consecutive day, trading around $73.90 per barrel during the Asian session on Tuesday.
goTop
quote