Silver price activity turned heavily bullish in New York trading after Apple’s earnings guidance warning seems to have reactivated coronavirus fears. As a result, the silver price is nearing breakout levels, as it has surged to start a challenge of the upper border of the bullish flag consolidation area.
The XAGUSD pair is now trading at 18.14680, which is the resistance level that is formed by previous clusters of price highs in October/Nov 2019 as well as early January 2020. This price level lies just above the flag’s upper border and is critical to the future price moves of the XAGUSD.
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Technical Outlook for XAGUSD
The silver price has violated the flag consolidation area and is presently pushing against the 18.14680 resistance. A break of the resistance area can be confirmed by two successive penetration closes that take silver price above this resistance. This would also confirm the flag breakout, which then targets the 29 August and 23 September 2019 highs at 18.65367. Further extension of this move which breaks above this resistance could then target the next upside target at 19.2732. Attainment of this target would complete the measured move from the bullish flag breakout.
On the flip side, silver price rejection at 18.14680 could allow price to return into the flag consolidation area. This move could extend the consolidation by allowing price to trade within the flag from one border to the other, until such a time when another breakout attempt may occur. However, a breakdown of the flag could open the door towards 17.18236, or even 16.80485. This move would invalidate the flag.
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