FX.co ★ Silver technical levels and trading recommendations for February 1, 2013

Overview

The H4 chart demonstrates today that silver is still trading below the Resistance level 31.50 after its failure to break it. Given that the pair takes a downward move till reaching the Support level 30.75 and manages to break it and closes 4H below, it provides a good opportunity to sell below the Support level 30.75. After that we should wait for breaking out of this Support level to continue the bearish move then we will get a bearish strength, which will provide new sell signals and enable the Support level of 30.20 as a target level. On the other hand, if silver reverses its bearish move and takes an upward and manages to break the Resistance level 31.50, it will be a strong indicator for the bullish move after closing 4H above the Support level enabling the Resistance level of 31.80. In this case, we should wait for breaking this Resistance level to continue the bullish view. Based on the given H4 chart, the technical indicators provide sell signals, but as long as the Support level of 30.75 is unbroken, the upward move is still expected invalidating the downward movement. Therefore, we should wait for more confirmations before making a decision.

Resistance and Support levels

R3 (32.30) R2 (31.80) R1 (31.50) S1 (30.75) S2 (30.20) S3 (30.00)

Trading recommendations

According to the previous analysis, we recommend selling in case of closing 4H below the Support level of 30.75 with TP 30.25; SL closing 4H below the Resistance level might be appropriate.