Silver poised for fresh breakout

Here is 6-hour chart of silver. Who on earth uses a 6-hour chart, you might be asking? Well, I don't either but the 4-hour chart would look too zoomed out to make out the price candles. Besides, time frame is irrelevant - price action is price action.

Anyway, silver looks poised for a fresh bullish breakout from a continuation pattern, assuming it can hold above key support at 28.80ish. That's the key takeaway point from this short article.

Silver broke above a major resistance area of $29-$30 earlier this year, although demand concerns over China meant the breakout would quickly run into trouble. Still, the white metal has lots of ground to make up on the yellow metal and it could narrow the price gap to near the historical average.

A potential rise back above $30 is what could trigger the next phase of technical buying pressure now that prices are no longer at overbought levels on oscillators like the RSI. A potential rise to $35 on silver should not come as surprise in the weeks ahead given the big breakout we have seen in recent months on the long-term charts.

But first thing is first, let's wait for the bullish breakout for confirmation before getting too far ahead of ourselves!

Written by Fawad Razaqzada, market analyst at FOREX.com