XAGUSD - INTERMEDIATE SHORT TO USD 23.30 (-10%)
A very interesting pattern has formed after a very strong recovery in Silver (XAGUSD).
We are now in consolidation mode within a rectangle pattern. High was reached at 29.80ish followed by a retracement and double-bottom formation suggested for a re-test of 29.80 area. Old high at 29.80ish was even topped by a higher high at 29.99ish.
Higher highs show strength and call for further upside, but always beware of bull-traps! As such in the case of XAGUSD – we’re likely having an intermediate bull-trap in action.
The break of the momentum support line (RSI 14) called for some caution and got confirmed by the market as XAGUSD crossed its price support line (red) which had been formed since early December 2020. This was a sign to close short- to mid-term longs and remain on the sideline or even short the pair.
Meanwhile, XAGUSD has found some support at 24.70 area and bounced to the 50% retracement area (26.69) which acts now as a key level to watch. A break of this level would suggest upside to 27.90ish.
However, such a formation is in most cases bearish and gives a measured target of 23.30. This is almost USD 2.50 (10%) lower than where we’re trading now.
We are now in consolidation mode within a rectangle pattern. High was reached at 29.80ish followed by a retracement and double-bottom formation suggested for a re-test of 29.80 area. Old high at 29.80ish was even topped by a higher high at 29.99ish.
Higher highs show strength and call for further upside, but always beware of bull-traps! As such in the case of XAGUSD – we’re likely having an intermediate bull-trap in action.
The break of the momentum support line (RSI 14) called for some caution and got confirmed by the market as XAGUSD crossed its price support line (red) which had been formed since early December 2020. This was a sign to close short- to mid-term longs and remain on the sideline or even short the pair.
Meanwhile, XAGUSD has found some support at 24.70 area and bounced to the 50% retracement area (26.69) which acts now as a key level to watch. A break of this level would suggest upside to 27.90ish.
However, such a formation is in most cases bearish and gives a measured target of 23.30. This is almost USD 2.50 (10%) lower than where we’re trading now.
Comment:
Down already 6% and more. Stay tuned!