Silver: Consolidating triangle below $18.50 holds
Yesterday’s signals were not triggered, as the bearish price action took place below the resistance level identified at $18.45.
Today’s XAG/USD Signals
Risk 0.75%.
Trades may only be taken before 5pm Tokyo time Wednesday.
Short Trade Idea
- Short entry following bearish price action on the H1 time frame immediately upon the next touch of $18.67.
- Place the stop loss 1 pip above the local swing high.
- Move the stop loss to break even once the trade is 10 cents in profit.
- Take off 50% of the position as profit when the trade is 10 cents in profit and leave the remainder of the position to ride.
Long Trade Idea
- Long entry following bullish price action on the H1 time frame immediately upon the next touch of $18.03.
- Place the stop loss 1 pip above the local swing high.
- Move the stop loss to break even once the trade is 20 pips in profit.
- Take off 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to ride.
The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.
XAG/USD Analysis
I wrote yesterday that the odds seemed to still be slightly in favour of higher prices soon, and the first sign of such a bullish movement would be a breakout beyond $18.50. I was looking for two consecutive hourly closes above that level, which did not materialise. This was a good call and at least enough to keep out of trouble.
The technical picture is unchanged – we can readjust the triangle’s trend lines to show it persists and we still await a breakout. However, the odds are now arguably in favour of a bearish breakdown from this triangle, so the best opportunity for a long trade entry might well be at $18.03. I would take a long trade at a bullish bounce there, but I would also take a bullish bias if we get a solid breakout above $18.67 later.
Regarding the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time.