Silver Price Eyes $22 as Bulls Gain Momentum

Silver extended upside movement on Tuesday, for the sixth day in a row as the white metal bottomed around $18.63 support area last week. The short term sentiment remains bearish due to Lower Low (LL) in the recent dip. A breakout through the long term trendline resistance could initiate the next bullish run.

Technical analysis

As of this writing, the precious metal is being traded near $19.07 an ounce. A support can be seen around $18.71, the trendline support as demonstrated in the following chart. A break and daily closing below the trendline could incite a renewed selling pressure, opening doors for a deeper correction below the $18.00 handle.

On the upside, the precious metal is expected to face a hurdle near $19.32. An upside breakout might trigger the next bullish rally targeting the $22.00 resistance area in the long run. Some major resistance levels on the upside include $20.32, the 38% fib level and then $21.34 that is the 61.8% fib level.

Fundamental analysis

With no major economic reports due in the US and China baskets this week, the silver is expected to remain on the mercy of technicals that consequently might continue the ongoing bullish momentum. Some medium level releases such as US retail sales, jobless claims and Reuters/Michigan economic sentiment reports are however due later this week that might incite moderate volatility in the price of silver.

Trade ideas

Considering the overall technical and fundamental outlook, buying the metal on a bullish breakout appears to be a good strategy, the trade should however be stopped out on a daily closing back below the trendline.