- XAG/USD is testing a critical resistance area of the daily M-formation.
- Bearish conditions yet to be confirmed on a 4-hour basis.
Silver has moved to test the daily M-formation’s neckline which raises prospects of a downside extension.
The following is a top-down analysis that illustrates where the next opportunity to the downside could result from current resistance.
Meanwhile, the weekly and daily chart are compelling.
The pair has completed a W formation and has found support.
However, on the daily chart, failures to move higher at this juncture offer a downside opportunity from an M-formation’s neckline.
24.70 comes in as the -0.272% Fibonacci of the bullish correction which meets prior support.
This level could be targetted once the 4-hour technical environment turns bearish.
MACD is still above zero in bullish territory, but with price resistance by the 21=moving average and at structure with a confluence of the 50% mean reversion level, then there is a high probability of bearish conditions developing.
Once conditions have been confirmed as bearish, a trade set up that might include a sell limit from resistance, would offer a high probability opportunity to short the market. A stop-loss above structure and a target of the -0.272% would offer in the region a 1:3 risk to reward ratio.
Source from https://www.fxstreet.com/news/xag-usd-price-analysis-silver-bears-look-to-prior-support-in-the-2470-area-202012240229