The silver metal formed a head and shoulder pattern in the daily time frame with its top at 24.90, upper neck line at 24.04 and lower neck line at 23.16; the structure and price action has broken the lower neckline to the head and shoulder pattern while mingling with our major support zone 22.10. Silver struggled to capitalize on the overnight bounce from the vicinity of YTD lows, instead met with some fresh supply on Wednesday. The commodity remained depressed heading into the North American session and was last seen trading around the 22.25-20 region, down nearly 1% for the day. Looking at the technical picture, attempted recoveries have repeated failed near the downward sloping exponential moving average 50 resistance on the 4-hour chart. However, the XAGUSD, so far, has shown some resilience near the 22.0 round figure, which should now act as a key pivotal point for traders.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

20.53 and 20.0 are our key support zones with high supply demand and liquidity in the market which can build hawkish momentum to the silver metal buy reversing the losses. XAG/USD after breaking below 22.05 - has favored the bears for a while unless it meets the 20.0 final support zone, a breakout below would be considered as the initiation of bearish momentum. Meanwhile, technical indicators on the daily chart are holding deep in the bearish territory and are still far from being in the oversold zone. This, in turn, supports prospects for an eventual break below the 22.00 handle and an extension of over three-week-old downward trajectory.

According to the elliot wave pattern, in the daily time frame, we can observe that silver is in its final 5th bearish wave and we will be noticing where it provides us with a closing. 

XAGUSD

Sep 29 2021