XAG/USD 4H Chart: Descending Triangle

Source: Dukascopy Bank SA
© Dukascopy Bank SA
There is a potential reversal looming in the four-hour chart of spot silver. The metal has recently failed to extend the rally from the April's low beyond 18 dollars, and the ensuing pattern, a descending triangle, implies a bearish outlook. The key support is at 16.90, represented by the lower boundary of the pattern reinforced by the monthly pivot point. If this level is broken, the price will be expected to fall through the 200-period SMA at 16.60 and down to the region of 16 dollars, where it is to meet the major up-trend support line that has been in place since the beginning of the year. Meanwhile, the metal is overbought—75% of positions are long, which means another strong argument in favour of a sell-off.
© Dukascopy Bank SA
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