For the best part of two years, silver was trading in a descending channel until the recent risk-off sentiment buoyed the metal market.
Prices then rose to yearly highs, breaking clear of all resistance handles and leading to a top at $29. However, since its ascension, we have witnessed a reversal on the metal. It now finds support at the 61.8% 29.81/11.67 downside Fibonacci leg, with prices trading inside the base and conversion of the Ichimoku indicator.
Should we see another attempt at the 78.6%, this would cancel out the hidden bullish divergence recently detected on the momentum indicator.
Another attempt at the golden ratio could see prices then target 50%, which would lead prices to the $20 region.
A look at the 4-hour chart shows that bias is on the upside for the short-term. The downturn seems to have ended over the past month, with prices now trading within the cloud.
A look at the momentum indicator hints at yet another hidden bullish divergence. This could lead to a push past the golden ratio of 21.63/28.92 upside Fibonacci leg, which is a confluence level at the top of the cloud.
The next targets will continue to the 50% and the 38.2% levels. This would see further attempts at 2-month highs towards $28.