The latest VW scandal increased concerns about a number of metals used in automotive industry. Silver has followed the suit and sharply declined as news broke out.
Precious metals, however, being safe-havens are often a good bet during times of uncertainty, such as now. If that’s the case, it could be a good time to invest in silver now after its decline from two days ago. Another quite often-working tendency is that silver follows gold in its dynamics, sometimes with even bigger amplitude.
Support and resistance
The price broke out its recent resistance levels and is heading up.
The RSI and Composite on the 4-hour chart are nicely diverging between each other and the price. Their short moving averages remain below the long once indicating the weakness of the market.
The daily chart, however, shows the RSI bounced off the support it tested yesterday and is heading upward. There is no divergence with the price yet, but the Composite has yet to catch up with the RSI to reduce the risks of buying in.
On the 4-hour chart, the price is testing its insignificant 38.2% retracement at 15.07 that was broken out few days ago.
Support levels: 14.89 (local lows), 14.77 (high volume trade), 14.49 (local lows).
Resistance levels: 15.45 (61.8% retracement), 15.76 (local highs), 16.13 (local highs).
Long positions can be opened after the price consolidation above the level of 15.15 with targets at 15.23, 15.59 and stop-loss at 14.97.
Short positions can be opened after the price consolidation below 14.80 with the target at 14.50.