This precious metal appears to have broken out of the reversal pattern we were observing earlier and is now gaining momentum on its upward move.
Could it see a major correction soon?
Check out these turning points I’m watching on the 4-hour chart!
Silver (XAG/USD) Forex 4 Hours Chart by TradingView
Gold prices have recently risen to all-time highs again, can silver follow suit?
After a somewhat difficult reaction to the FOMC decision, the precious metal seems to be inclined to continue its upward trend, as it makes another attempt to break above the top of its ascending channel.
Can the resistance hold again?
Remember that directional biases and volatility in market prices are usually driven by fundamentals. If you haven’t done your homework on the US dollar and silver yet, it’s time to take a look at the economic calendar and stay up to date with the daily fundamental news!
As you can see from the chart above, silver is still hovering around the resistance level near the pivot point level ($30.773). If the ceiling continues to hold, the price could drop to the nearby support areas identified by the Fibonacci retracement tool.
The 38.2% level is near S1 ($30,016) and then the 50% Fibonacci retracement level is closer to the middle channel area of interest at $29,572. The 61.8% retracement level coincides with S2 ($29,049) and the dynamic inflection point of the 200 SMA. The 100 SMA is above the 200 SMA suggesting that support levels are more likely to hold than break, which could lead to a return to the highs and beyond.
If the silver bulls are too eager to attack, XAG/USD could simply take off towards the recent highs at $31,450 and go for a sharper climb to the next upside targets at R1 ($31,838) and then R2 ($32,498).
Don’t forget to practice proper risk management and stay aware of top-tier market triggers when trading this product. Good luck!