Silver took a big hit earlier this week when the price sank to $22.392; the pair managed to recover some of the lost ground that day and closed with a 3.6% loss at $23.436.
Although moving averages indicate that the downtrend will continue in the long term, we believe that a retracement could allow the RSI to recover into a more neutral position before the downtrend continues.
The Bollinger bands are very wide, and this will bring higher volatility to the pair. The price trades very close to the lower band, indicating that it is relatively low; this will naturally signal traders to close their short positions and start buying at a good price.
In addition, the relative strength index is currently at 28%, which is considered oversold and an indicator that the price could start rising soon. The precious metal has everything in place to start recovering in the short term, but to be safe, we will have to wait and see if the first resistance at $23.891 can be broken in the next few days.
The parabolic SAR indicator suggests that the price will continue to fall in the short term; however, due to the oversold RSI and the price trading close to the lower Bollinger band, we do not anticipate a more significant drop in the short term as it is considered a low price already.
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