Silver’s movement against the US Dollar during the previous eight weeks has been bounded in a channel up. During its latest wave up which started on January 23, the pair failed to reach its upper boundary and reversed near a long-term down-trend (dominant in 2017) circa 17.70. Its subsequent movement resembles a minor descending triangle.
In line with this pattern, a breakout should occur to the upside. Prior to this scenario, Silver might still edge lower for a brief period of time down to the support of the 200-hour SMA at 17.20, thus returning near the 17.50 mark within this week. Given that this area is reinforced by the 55-hour SMA and the monthly R1, bulls might be reluctant to breach it right away.
In case the down-trend at 17.70 is breached, the pair should advance towards 18.10.
In line with this pattern, a breakout should occur to the upside. Prior to this scenario, Silver might still edge lower for a brief period of time down to the support of the 200-hour SMA at 17.20, thus returning near the 17.50 mark within this week. Given that this area is reinforced by the 55-hour SMA and the monthly R1, bulls might be reluctant to breach it right away.
In case the down-trend at 17.70 is breached, the pair should advance towards 18.10.