XAGUSD/Silver Technical Outlook


Sophia Todorova has a background in teaching and psychology, and as such relishes the idea of assisting new traders on their journey to Forex trading success. Technical Analysis is her passion. The charts speak, and she listens.

 

I quite recently became interested in Xag/Usd/Silver. As a trend trader, it really is the perfect instrument to trade, as the manner in which it trends is second to none! My aim in trading Silver is to get in on a decent enough retracement to be able to hold it for the longer-term until the next major correction takes place. We saw a slight correction in the enormous uptrend several weeks ago when 26.30s got tested before quickly being rejected. The more recent retracement ended at only the .618% retracement of the 31.70, 36.72 swing, and a rapid move ensued up to 38.17, where a daily doji bar now resides. At this obvious sign of possible topping action, I cannot look to buy at this level. Instead, I have tried to project a nice level that boasts an array of convenient convergences for a possible long entry. I have illustrated my plan on the daily chart below:

I am looking for a head and shoulders reversal pattern to form on the daily chart, with the 36.20 previous resistance area as the left shoulder. I would like to see a break in the inner trendline ( drawn in blue), and a retest of its underside to form the projected right shoulder. This could present a trading opportunity to short down to the main up trendline at 31.00. It is at this level that I would like to find a buy setup. There is a convergence of support here resulting from: (a) the daily trendline; (b) previous weekly resistance; and (c) the .618% fibonnacci retracement level of the big 26.36, 36.17 ‘A, B’ upswing.

What is your take on Xag/Usd? I’m a newbie at it and would appreciate all the help I can get 🙂

 Thanks a lot, and have a divine weekend!

 Other useful blogs:

 Forex Crunch:Forex Weekly Outlook- Mar 28-Apr. 1

 The GeekKnows– Daily Commentary on Eurusd

One other free trading tool I recommend is Currensee . It can be a useful tool to be able to see how other professional traders are doing.

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  • StigmaI

    This pair drives me crazy! It offers such great pip potential with small leverage. What I do is keep a tight stop after entry on any trending move. If the stop gets tripped and the trend is still intact, I reenter in line with the trend. Setting Take Profit points can be tricky and frustrating. I let the trend with a tight Stop Loss lock in my profits.

  • Hi JM. I don’t have a time projection for the 31.00 target level. It appears to be quite volatile, so if a reversal sets in it shouldn’t really take too long to get there. Then again, I don’t have the experience trading Silver to give a good indication. You’re welcome, and thanks for reading 😉

  • I appreciate your comment, WillieWalk. Thanks for the chart. I don’t really know Elliott Waves, but I’m having a good look at your chart. Have a nice day! 🙂

  • Thanks a lot for your comment, Sayed. I will be following both Gold and silver closely as of now. Have a great day!

  • You’re welcome, Abd. Thank you for your comment 🙂

  • Hi Shazzy. Thanks for your comment. I readily acknowledged that it was my very first time looking at silver, so yes, I guess you could say that. This is a new instrument for me. All the best

  • Thanks a lot, Jet. I’m excited about starting to trade it too 😉

  • Thanks so much for your insights, Peter. I really do appreciate it. Looking forward to learning more from you! 🙂

  • JM

    How long is your projections for silver to hit the 31 level if it does take plaunge, it seems like it may take weeks to months to hit that low? Thanks for your insight.

  • WillieWalk

    Here is my wave count on SIL. 5 waves up to 36.77- abc correction down to 33.61, which wud be 2 wave down. we then made 5 waves up to new high, 38.18 and just complete abc correction down to 36.45. next stop 44. http://yfrog.com/h0rn0p

  • Sayed Haider

    Believe it or not, I also got interested in Gold since today morning only as the chart is really tempting
    and it look like that a bullish trend has started after retracing down to 50% fib level. The other good factor to do the trade in silver and gold is they only have one way traffic that is what way it goes it will eventually go towards the north.The History is itself explanatory. Just go back only 6 to 7 years and
    see where were the gold and silver. Also the demand of silver will much increase as now silver is very hugely used in construction, furniture are made of silver, microvave oven, refrigerators, cutlery
    and you name it and silver is there whereas the silver mines and production is low so there are all good reasons to do the gold and the silver. Economics say when the demand is more and the production is less then the price will go high. Therefore I am much inclined that these two metals are
    perfect to trade. On the other hand I am a bit confused on the future of GBP and EURO right now.
    Regards
    Sayed Shazad Haider

  • Abd Almouhemen

    Sophia thank you for the commentry
    i am agree with your view

  • shazzy

    Silver is in no situation to come down from the support of $36.8 . You could have a beeter knowledge of silver by reading this blog daily…..the best and accurately explained accordingly TWICE everyday along with the charts………..
    Its no where a scenario as you said…u really have no idea about silver …right?

  • jet

    nice analysis going to start playing spot myself. futures too volatile for this contract. big atr

  • I have been trading silver for several years and agree with your assessment that the short side has the most potential in the near term. Here are some quick thoughts that come to mind on Saturday morning over a cup of coffee:

    Beside the technical reasons you sight, there are seasonal and other timing factors that will put pressure on silver that ultimately could potentially take it even lower than the $31 target (which FWIW I agree as the first target), into the summer months…
    Some things to consider: due to the volatile nature of silver, you need to have very wide stops. Normally the best time to place a short would be within 30 minutes of the session open, especially if silver opens higher that the previous close. For instance in NY, the pit opens at about 8:20am, so the shorts will often push it down after a rally attempt after 9am; sometimes depending on reports due that day, aggressive selling will occur starting just after the London open…
    Gold is less volatile that silver, so the chart is more orderly.
    I’ll be watching with interest as your trading plan and execution develops & will offer more suggestions as we get close to execution time. Being on US Pacific Time, unfortunately our trading time don’t overlap very much…
    Wishing you continued success with your trading.
    Peter

  • kizito da vinci

    nice.. keep it up