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XAGUSD: Expect Another Explosive Rally Above $26

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On October 13th, I wrote about a descending channel on silver (XAGUSD).

Due to the recent uptrend that began following the March selloff, this channel looks to be a bull flag.

In other words, a close above resistance could trigger a trend continuation.

The idea of a higher XAGUSD price is also in line with what’s happening on the monthly time frame.

XAGUSD silver breakout from consolidation
XAGUSD monthly time frame

Notice how silver recently broke out of a six-year consolidation period.

I can’t overstate how significant that is.

The July 2020 breakout alone is incredibly bullish for XAGUSD over the next few years.

I should also point out that the $26 area will be a hurdle for buyers.

The pair broke below that level in September.

That means silver bulls need to get back above channel resistance, but they also need to clear the $26 region.

Do that, and we could see another explosive rally from silver.

A daily close above $26 would open the door to the $30 resistance area, followed by $35.

If we treat this as a bull flag pattern, the measured objective comes in near $40.

Disclosure: I hold multiple silver positions from the $18 area per my June 30th post.

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XAGUSD silver bull flag
XAGUSD daily time frame

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4 comments
Justin Bennett says

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Oniyide kayode says

Thanks Justin for the analysis

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ali says

thanks for the update justin.

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monch says

Hi. Is there a correlation between the prices of gold and silver? Or does silver move independently of gold?

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