We can identify the larger pattern clearly on the 8-year chart on which we can see that the price remains within the confines of a steady downtrend from the highs in 2011, which shows no signs of ending. The rally early this year failed at a former important support level that is now resistance and at its falling 200-day moving average, which failure points to new lows ahead. If the dollar index continues to rally strongly – and the current move has an immediate target at 102 – silver could easily drop to contact the lower boundary of its downtrend channel, meaning that it could drop below $12. To start looking positive again, silver has to break out of this stubborn downtrend channel, and there’s no sign of that happening at the moment.

By Theodoros  Batsoulis
Technical Analyst
Risk Market
www.riskmarket.co.uk