XAG/USD 1H Chart: Channel Down

Source: Dukascopy Bank SA
© Dukascopy Bank SA
The bias with respect to silver is negative, considering that the price has recently violated the ascending support trend-line and formed a bearish channel. At the moment, the metal is closing in on the upper edge of the emerging pattern, implying that the outlook is bearish for the near term as well. XAG/USD is expected to bounce off of 17.33 and fall through the short-term up-trend at 17.17 until it hits the green trend-line near 16.80 dollars. Meanwhile, the distribution between the bulls and bears observed in the SWFX market also favours a lower price, being that right now 72% of open positions are long, which means that silver is overbought and that there are unlikely to be more buyers.
© Dukascopy Bank SA
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