Looking at the 1-hour chart of silver, it can be seen that the price has been moving within the descending channel since February 10. In fact, there were attempts to break through its lower boundary on February 15 and 17, but the fall was prevented and the quotes went back to the range. By the end of Friday's trading session, the "bulls" have already attacked the upper boundary of the channel, and we can see further moves today.
Since the beginning of trading, silver slipped to the falling trendline, but this movement failed to continue, and as a result, a breakdown of the downtrend channel upwards can be seen as confirmed. So, there are now growth targets for silver at the 50% (21.88) and 61.8% (22.05) Fibonacci retracement levels.
However, silver prices are not likely to surge today, as there are not so many traders in the market due to the U.S. holidays. As of Tuesday, trading activity is expected to rebound. The highest volatility is seen at the end of the week, when another batch of U.S. macroeconomic statistics will be released.
The most anticipated data is the Q4 2022 U.S. GDP (second estimate), coming on Thursday. Moreover, the Personal consumption expenditures price index (PCE) will be revealed on Friday, and the Fed is going to use it in order to gauge inflation and predict the future of its monetary policy. This is when strong movements in the financial markets can be expected.
As long as silver prices are above the Fibonacci level of 38.2% (21.72), the upward momentum remains strong. Long positions can be opened there, looking to reach the levels of 21.88 and 22.05. Stop loss can be placed at the upper boundary of the descending channel, and now it is near 21.55.
The following trading strategy can be suggested:
Buy silver in the range of 21.7-21.8. Take profit 1 - 21.88. Take profit 2 - 22.05. Stop loss - 21.55.
Traders may also use Trailing stop instead of a fixed Stop loss at their discretion.
This content is for informational purposes only and is not intended to be investing advice.
