Is a Silver Squeeze Coming?

Silver made a violent move last summer when it broke a six-year resistance level. Prices have consolidated since but now the bulls may be returning.

Notice how XAGUSD probed and held its 200-day simple moving average (SMA) in late March and the first half of April. This was the first test of the 200-day SMA since May.

Second, prices have broken a short-term bearish trend line running along the peaks of February and late March. They’re now trying to break roughly $25.75 - $26.50, a consolidation zone from mid-March.

Third, Bollinger Bandwidth has turned up after falling near 7 percent. This has been a floor for the range of motion. That could help fuel a move if the price action starts to expand.

There’s also a catalyst next week with the Federal Reserve meeting on Wednesday.

The white metal is a strange product overall, with flashes of excitement and long periods of boredom. It’s been inert for months, but now the price action could be pointing toward another period of quicker movement.

TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.