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Commerzbank Notes: Silver Has Reached Fibonacci Retracement

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EDITOR NOTE: Pardon the technical Fibonacci jargon below. I’ll translate. On February 1, many traders, some quite large, went short silver as it hit the price of $30.35. Silver went as low as $23.75 an ounce by the end of March. That in itself was a good profit for short-sellers who closed their positions. But by May, the price of silver reversed toward the upside and retraced 50%. That means that the shorts who got in near the top, saw their profits (from the entire price swing from the top to the “bottom” at the end of March) shrink by 50%. Still, not a bad “short” profit. But now, with silver having risen to $28.73, the short sellers' profitability has been reduced to around 22%, meaning their profitable “open position” has shrunk considerably. This may be the “uncle point” where short sellers will have to either double down (selling even more to try to pressure the market downward), or closing their positions by purchasing them. If they do the latter, then they may end up triggering a massive short squeeze, where the price of silver can skyrocket past $30 an ounce. As we’ve said before, now’s the time to buy non-CUSIP silver coins or bars, before price advances in its next leg up.

Silver (XAG/USD) has reached Fibonacci retracement at $28.73 – this is seen as the last defence for the 30.09 2021 high, as Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, notes.

XAG/USD underpinned by the $25.65 level

“Silver has reached $28.73, the 78.6% retracement (Tuesday’s high was $28.80). This is regarded as the last defence for the $30.09 1st February high.” 

“We have a near-term uptrend at $26.83, ahead of a near term pivot at $25.65, the 8th April high. While above here we will maintain an immediate positive bias. Below here lies the $24.68 12th April low and $23.76/57 the lows of the past 5 months.” 

“Longer-term, we are bullish and a break above $30.09 will target the $30.76/50% retracement of the entire move down from 2011.”

Original post from FXStreet

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