XAG/USD 1H Chart: Triangle

Source: Dukascopy Bank SA
© Dukascopy Bank SA
Silver is set to lose even more value in the nearest future in addition to the 12% decline seen during the first few days of October. As a result of this decline XAG/USD has pierced through a support line that has been guiding the price north since the very start of 2016, leaving the rate with no levels to lean upon. The closest significant demand zone is seen at 17.28/26, created by the 200-day SMA, but the height of recently formed triangle implies a much deeper down-move, namely to 16.20. Technical indicators too are suggesting more weakness. Moreover, the metal, despite its depreciation, is still heavily overbought—73% of positions are long, meaning plenty of space for more sellers to enter the market.
© Dukascopy Bank SA
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