I’m seeing a textbook correction play on the 4-hour chart of silver!

Will resistance preserve holding?

As you may see from the 4-hour chart under, the commodity worth made decrease highs linked by a falling pattern line.

Silver (XAG/USD) 4-hour Chart by TV

Now this resistance zone has been holding since mid-Might, so it would nonetheless function a ceiling this time.

To prime it off, the pattern line coincides with a former assist space round $23.00, the 50% Fibonacci retracement degree, and the 100 SMA dynamic inflection level.

Discuss confluence, huh?

The 100 SMA is under the 200 SMA to point that the selloff is extra prone to resume than to reverse. This may be sufficient to take silver again all the way down to the swing low at $22.13 or decrease.

As well as, Stochastic is reflecting overbought situations or exhaustion amongst patrons, so heading again down would imply that sellers are taking on.

I’m even seeing a little bit of bearish divergence, because the oscillator made decrease highs whereas XAG/USD had increased highs.

A better correction might nonetheless attain the 61.8% Fib at $23.45, however this may be the road within the sand for a bearish pullback.

Higher preserve tabs on total market sentiment and top-tier U.S. information just like the NFP launch when buying and selling this one!