XAGUSD (silver) has had a volatile start to the week.
Monday’s $2.60 range may not sound like much to some, but those familiar with XAGUSD know that’s a massive range for the metal.
As always, I’m more interested in where silver closed the day than anything else.
If you saw last week’s XAGUSD article, you know buyers have to clear the $26 area on a daily closing basis to expose higher levels.
Remember that I use New York close charts provided by Blueberry Markets.
That means every daily candle opens and closes at 5 pm EST.
As for Monday’s session, it’s a bit too close to call right now.
Keep in mind that the $26 area could extend as low as $25.60 and as high as $26.50.
I’d like to see a more convincing close above the $26 area before announcing the break as confirmed.
That said, I continue to like XAGUSD much higher in 2021.
My $40 target for the metal hasn’t changed.
I first wrote about this on December 4th.
I know some doubt this as a bull flag and like it as a wedge pattern instead.
However, I would argue that it’s both.
That means the measured objective of $40 is worth keeping an eye on.
As I mentioned on October 13th, I still believe XAGUSD dips are for buying, and that silver has a ton of potential in 2021.
In fact, those who followed my commentary on December 17th managed to buy Monday’s dip.
Here’s what I wrote last week:
If XAGUSD does pull back from the $26 resistance area, I will keep a close eye on how it reacts to $25 as new support.
I’d expect buyers to defend that area to keep the rally effort intact.
Note Monday’s low was $24.82, just $0.18 below the $25 support that I mentioned last week.
Key resistance on the way up includes $30, $35, and the measured objective at $40.