Did the silver price break down after the FOMC rate hike in June 2022? We sure did see that the price struggled, it started even before the announcement, as silver was unable to clear resistance in the $22 area. But does that mean that the price broke down now? Not necessarily. Find out why in this article today. As per our latest Trade Alerts weekend analysis there is one super bullish data point in the silver market, historically bullish.
Note that we have been following both the silver and Gold price performance pretty closely both in our premium momentum trading service and our public domain. You can find below some articles that we shared publicly:
- Silver price following FOMC rate hike in June
- Silver price still constructive, here is why.
- Our Silver price forecast for 2022
- and of course, InvestingHaven’s most recent USD update
Did Silver Price Breakdown In June 2022? Let’s Take A Look At The Charts
The last time we shared the weekly Silver chart included below was on June 12th: Silver on the verge of a big move. At that time, we mentioned the following:
There is however a reason to remain cautious in this chart below: The dotted trendline (2 touches so far, therefore not valid yet). That could turnout to be a double bottom with a higher high or a bear flag in the making. Should that bear flag materialize, we could see silver price trading at $19. That would be in line with the weekly support area highlighted above so no damage there to the bullish setup in Silver price.
If the price breaks below $19, that would invalidate the assessment above.
We indeed ended up back testing that $19 area ($19.4 to be precise). So far, the support area did hold as buyers stepped in on Friday.
Silver’s monthly chart was the one exhibiting the most strength and respect of the pattern’s boundaries. This is changing now as we start the month of July. That last candle we see outside the flag is the month of July’s candle. It’s currently very premature to draw conclusions from a single trading day’s candle but it is concerning.
That candle is one that we will be closely monitoring. It could be a bear trap but for that to be the case, bulls have to step up and bring the price back above $20. At a minimum before the close of the month of July.
Below is the daily chart. We can see that there is one thing in common across all 3 timeframes: the silver price is in a horizontal support area. Therefore, the odds favor that support holds. It is not annotated on the monthly chart, but it is there nonetheless. Exactly where the price bounced.
So did the silver price break down in June 2022? So far partially, but silver’s price is sitting at a crucial support area that absolutely needs to hold. A quick recovery can invalidate the breakdown attempt in order to qualify as a bear trap. We need a decline in the USD for this to occur, starting the coming days.
Bonus Chart: Gold/Silver Ratio
From time to time, it is important to check on the Gold/Silver ratio. This ratio is simply an indicator of how undervalued silver is compared to gold. When this ratio tops, it can indicate that silver might start outperforming gold.
Which one will outperform is not necessarily the insight we are looking for here. However, we do notice that the ratio is hitting a resistance area. This might indicate a possible upwards move for Silver, therefore corroborating the findings mentioned above: That Silver is in a support area and that the support is likely to hold.
As indicated before, our bullish theory invalidates with the price breaking below $19.
Make sure you check out our latest Gold price update to see where we believe the price is heading. It also includes an update on the USD with the closed weekly and monthly candle for June 2022.
Also, check out more charts and the one super bullish silver market data point in our latest Trade Alerts weekend analysis.
Written by hdcharting, reviewed by Taki Tsaklanos