Silver is developing a corrective structure as an A-B-C pattern from the impulsive sequence started on November 2018, when found bottom at $13.860. From this level, XAGUSD has moved bullishly in five waves reaching the $16.200 in June 2018. We expect a new bullish leg which could start soon.
The Big Picture
The Silver daily chart shows that the price develops a corrective sequence as an A-B-C structure, which still could make a new lower low. If Silver continues its corrective path, it is likely it would complete a second bearish equal leg between $14.44 and $14.115. In this area, XAGUSD could find buyers expecting to activate their limit orders and, then, make a bullish sequence in five waves of an upper degree. The RSI supports the corrective move making a triangulation and moving below the EMA(55). The long-term invalidation level is 13.860 level.
The Short-Term Outlook
Short-term, the 2-hour chart reflects the exhaustion signals commented on the big picture. Despite the bearish bias due to corrective structure, we consider long positions in the following scenarios:
- If the price closes above 15.035, the first target is 15.275.
- Once the price breaks above 15.275, the next target is 15.600.
- Finally, if Silver climbs and closes above 15.600 (B), our next target area is the $16 zone.
- The short-term invalidation level is 14.800.
- If Silver closes under 14.800, it could indicate more declines with a potential profit target at $14.440.