XAG/USD 4H Chart: Ascending Triangle

Source: Dukascopy Bank SA
© Dukascopy Bank SA
Silver has been in a distinct downtrend since the first half of 2011, but there is a good possibility that in the perspective of the next several weeks the metal is going to appreciate. At the moment, the price is forming an ascending triangle—an argument in favour of growing demand. The bullish outlook will be confirmed once resistance at 15.86/83 is out of the way. In this case, considering the height of the pattern (200 pips), the target will be the May 2015 high at 17.80, but the initial objective will be the highest point since last year's October, namely 16.38. Still, there are reasons why XAG/USD might not be able to recover, as the instrument is overbought in the SWFX market—72% of positions are presently long.
© Dukascopy Bank SA
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