XAG/USD 4H Chart: Silver likely to edge higher
Silver had been moving in a channel down against the US Dollar since mid-January prior to breaching this pattern yesterday.
The failure to initiate a new wave down was caused by an upward-sloping trend-line which reversed the rate near 16.30 mark where the 23.60% Fibo retracement is located. As a result, the pair went for a breakout of the channel, at the same time dashing through the combined resistance of the 55– and 100-period SMAs and the weekly PP. A breakout of such a strong barrier does suggest that a surge is likely to follow in the medium-term. A possible upside target is another trend-line, reinforced by the 61.80% Fibo retracement, near 117.30.
In terms of the following trading sessions, it is likely that the pair tries to form a rebound from the breached channel just to gain some strength for a breakout of the 200-period SMA. However, the support cluster located circa 16.50 should force a reversal back north.
The failure to initiate a new wave down was caused by an upward-sloping trend-line which reversed the rate near 16.30 mark where the 23.60% Fibo retracement is located. As a result, the pair went for a breakout of the channel, at the same time dashing through the combined resistance of the 55– and 100-period SMAs and the weekly PP. A breakout of such a strong barrier does suggest that a surge is likely to follow in the medium-term. A possible upside target is another trend-line, reinforced by the 61.80% Fibo retracement, near 117.30.
In terms of the following trading sessions, it is likely that the pair tries to form a rebound from the breached channel just to gain some strength for a breakout of the 200-period SMA. However, the support cluster located circa 16.50 should force a reversal back north.