Flag pattern on 4-hour chart favors XAG / USD bears

- Advertisement -
  • Silver struggles to capitalize on the positive move the day before to three-day highs.
  • A short-term rising channel constitutes the formation of a bearish flag pattern.
  • Technical indicators on the daily chart add credibility to the negative outlook.

Silver has seen some selling during the first half of trading action on Wednesday and has returned some of the strong positive move from the previous day to three-day highs. The XAG / USD has maintained its selling tone during the European session, although it has managed to recoup some of its intraday losses. At the time of writing, the white metal is trading around $ 25.85, still losing 0.20% on the day.

Meanwhile, the recent bounce from the $ 24.85-80 region, at a five-week lows hit last Friday, has been moving into a descending channel. Given the recent sharp decline, the channel constitutes the formation of a bearish flag on short-term charts. The bearish setup is reinforced by the fact that the XAG / USD has been struggling to capitalize on attempts to rally beyond the $ 26.00 level. Also, the oscillators on the daily chart have just started to move into the negative territory.

- Advertisement -

Therefore, a subsequent decline towards the trend channel support, near the $ 25.20 region, en route to the key psychological level of $ 25.00, remains a clear possibility. Some subsequent selling below the $ 24.85-80 region will reaffirm the bearish breakout. The XAG / USD could become vulnerable and accelerate the slide to challenge the very important support of the 200-day SMA, currently around the round level of $ 24.00.

On the other hand, any significant recovery attempt would be viewed as a selling opportunity and would continue to face resistance near the $ 26.00 level. This, in turn, should limit the rally of the XAG / USD near the trend channel hurdle, around the $ 26.20 area.

- Advertisement -

Silver 4 hour chart

The payment

Silver technical levels

.

- Advertisement -

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Hot Topics

Related Articles