Daily Price Action

XAGUSD: Next Stop $21?


The last time I wrote about XAGUSD (silver), the metal was breaking out of a wedge pattern on the daily time frame near $18.

It was a pattern that was incredibly similar to the one that developed a few weeks before at $15.

Here’s the daily chart from my June 30th post:

XAGUSD daily time frame (June 30th)

Following that breakout, XAGUSD retested the top of that wedge pattern but never closed back inside of it.

That meant the $18 area was always holding as support.

Our target following that breakout was $19, which I also wrote about on June 30th.

Notice how the $19 region is the top of a multi-year descending channel.

XAGUSD monthly time frame

Silver hit our $19 target on Monday.

But I don’t expect channel resistance to hold for long.

Although silver hasn’t rebounded quite as aggressively as gold following the March selloff, it has had an impressive run.

Furthermore, as I mentioned in late June, silver usually lags gold at the beginning of bull markets, but eventually outperforms.

For now, though, buyers have to clear $19.30 to confirm the breakout.

In other words, XAGUSD needs to close the day above $19.30 to expose the channel’s inception point at $21.

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XAGUSD daily time frame

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Justin Bennett says

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Roberto Biagio says

Great heads-up. Thank you!

Deepak says

Thank you Justin

speculator says

Hi Justin, your analysis is very interesting to read.Thanks.

Zaki says

Great. I concur with you and you gave me confident to move my target from modest 20 to 21

Billy Norris says

Great Thinking

Eliana Cruz says

Thanks for this posting. I am very impressed with it, sure this is one of the best articles.

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