Daily Price Action

XAGUSD: Silver Edges Closer to Breakout Territory


Silver (XAGUSD) is knocking on the door of a bullish breakout.

I’ve discussed the bullish outlook for XAGUSD since it was trading at $18.21 on July 13th.

We’ve also been monitoring the bull flag pattern on the daily chart below (second chart) since October 13th.

All of that build-up may be about to pay off for buyers.

But first, let’s revisit the monthly chart for silver.

XAGUSD silver breakout on the monthly chart
XAGUSD monthly time frame

There’s no denying that 2020 has already been a big year for XAGUSD bulls.

After six and a half years of consolidating below the $22 area, silver finally broke out this past July.

And it was no ordinary breakout, either.

The six and a half years of coiling below $22 triggered a $17 move between July and August.

Then came the pullback.

Despite what some may think, XAGUSD pulling back from $30 to $21.60 over the last few months is perfectly normal and healthy.

It hasn’t even amounted to a complete 50% pullback, so no need to be alarmed.

All that said, XAGUSD bulls still have work to do.

Until silver produces a convincing daily close above $24.50, channel resistance remains intact.

The way the market continues to pressure channel resistance tells me a breakout isn’t far away.

Key resistance following a close above the $24.50 area would open the door to $26, followed by the recent high at $30.

As I mentioned on December 4th, this bull flag’s measured objective could send XAGUSD to $40 or higher in 2021.

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XAGUSD silver daily chart showing descending channel
XAGUSD daily time frame

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Justin Bennett says

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Martin Njeru says

Thanks Master for continued support, I want silver to create higher high, i have a small position that position is few pips blue,but there is inside bar formed early last week that signs break up to the upside

    Justin Bennett says

    You’re welcome.

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