XAG/USD 1H Chart: Descending Triangle

Source: Dukascopy Bank SA
© Dukascopy Bank SA
Similarly to gold, silver is also currently forming a descending channel in the hourly chart, a pattern that implies a decline. The 200-hour SMA has already been breached, and if the support at 17.17/13 is broken as well, the price will likely return to the six-month up-trend line at 16.25 dollars. Meanwhile, the negative outlook is reinforced by the positioning in the SWFX market. As many as 73% of traders are presently holding long positions, meaning there is little room for new buyers to enter and drive the price higher. Still, we should not completely rule out a rally through the resistance at 17.41/36, as the technical indicators, especially in the four-hour time frame, are not in favour of a sell-off.
© Dukascopy Bank SA
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