Potential short-term long play on silver

FX:XAGUSD   Silver / U.S. Dollar
Yes, that's a confusing title.

This is a potential shorter-term long play. On the 1H chart, XAGUSD is at an interesting level. The horizontal blue line indicates the previous swing low and it clearly acts as a support level that seems to hold. We can see a relatively nice downtrend with multiple swings, while the trend is now in the overextended territory as well (I haven't added Fibonacci extension levels, but it's well over 200% now).

However, it appears to be changing direction. From the past two trend waves, we can see that there's RSI divergence. The initial test of support (after the French election result) was strongly bought but the market faded the push higher and wanted to go for another test. The second test of the support level went the same way up, visible by the strong bullish bars that followed it. This created a double bottom , one of our favourite reversal chart patterns.

By now, this starts to look like a classic rounding bottom reversal. Currently, the price is testing lows again and I hope that it makes a higher low, as this would confirm our suspicion that a reversal is underway.

What I'm still waiting for is the momentum push upwards. A strong bullish bar, potentially taking out some of the previous ones, would be the trigger for me to take a position. If the price does decide to move lower, we just do nothing. For now, as always, we're in waiting mode.

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Order cancelled: Well, this move down invalidated the idea for now. The price wants to move lower still, so I'll be on the sidelines until a new opportunity comes along.
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