Silver Price Trades Steady as WHO Dispels Coronavirus Fears…For Now
Silver price is trading in a tight intraday range after the WHO helped dispel coronavirus fears yesterday, allowing some element of risk sentiment to come back into the market. XAGUSD is currently trading at 17.70242 at the time of writing, just short of the intraday high of 17.78541 as the silver price activity continues within the middle of the consolidation area of the bullish flag.
Prices of commodity assets have continued to oscillate as markets swing from risk-on to risk-off sentiments and back again to the risky end of the spectrum in response to the coronavirus outbreak and global spread.
Silver price action on the daily chart continues to trade within the flag consolidation, as the evolution of the bullish flag pattern continues. Over the last few days, recent highs and lows of silver price have caused the pattern to shift from the pennant to the flag formation.
The technical expectation for the bullish flag is to have a breakout which leads to a continuation of the recent uptrend that started from June 2019. An intervening falling wedge allowed for some price consolidation between August and December 2019, before the uptrend continued. Confirmation of this breakout has to come via a double successive candle close above the 17.14680 price level which marks the flag’s upper border. The initial target would be the 29 August and 23 September 2019 highs of 18.65367; a price level which was briefly violated on 8 January 2020.
On the flip side, a break of the price move below the 17.41482 price level, which corresponds to the lower flag border, invalidates the pattern and opens the door towards the 17.18236 price level, where the 16 October low interacts with the 20 November and 3 December 2019 highs.
The situation continues to evolve as the coronavirus epidemic plays out.