Conclusion for today’s XAGUSD Analysis:
A breakout and price close above 16.202 is bullish for Silver….bullish price swing should last for weeks to months.
The Daily timeframe is examined in today’s XAGUSD analysis with coverage from price peak of 21.00 on July 1, 2016 to current date. Previous XAGUSD analysis can be found here. The major trend in Silver ever since its peak of 21.00 is bearish. The chart pattern that is of consideration in this analysis is the falling wedge chart pattern (diagonal).
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Another chart pattern that would also be valid for price action in XAGUSD is a bearish price channel. In either case, a bullish breakout upon confirmation is ideally anticipated. Further discussion will focus on the use of a falling wedge in conjunction with other important aspects of the chart annotation.
The 50 day and 200 day moving average of XAGUSD is used to help maintain proper perspective in price action with XAGUSD currently consolidating at the 200 day MA. A break below the 200 MA is bearish and could possibly trigger more selling, with a close below 14.52 increasing the chances of XAGUSD testing the lower boundary of its falling wedge.
16.202 and 15.594 are indicated on the chart as immediate resistance price levels in XAGUSD. The most conservative strategy to go long (buy) involves buying on a breakout above 16.202. Less conservative strategies would seek to buy prior to confirmation or price close above the upper boundary of the wedge.
A great advantage of understanding chart patterns is their forecasting ability. Assuming the use of a bearish price channel for example, the width of the channel can be used for a bullish silver forecast long term once price closes above the upper boundary of the channel.
Such projection would be the minimum price anticipated for the bullish swing with the trade expected to last for weeks to months.
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