Silver price (XAGUSD) is currently trading around the 17.46 mark as it marks the completion of what can be described as a muted trading week. Trade volumes for XAGUSD continue to remain low and the upbeat Chinese Industrial Production numbers did little to boost the asset.
XAGUSD made an intraday high of 17.568 and intraday low of 17.396. The bias for the pair in the near-term remains neutral, especially as silver price action appears to be contained within a symmetrical triangle.
Price action is very close to convergence. It is therefore quite possible that we may see a big move on XAGUSD pretty soon. The bias is for price to break above the triangle when completing the pattern, as price action enters the pattern from an uptrend. However, this is not set in stone and price has been known to break from the same border that price used in entering the pattern. This is usually the case when institutional players are taking out stops to initiate renewed accumulation or distribution actions on the asset.
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In the meantime, horizontal support within the pattern lies at 17.37 (September 17 and October 7 lows). A break below this price level brings the price bars in contact with the lower border of the triangle, where a challenge will be mounted for a breakdown to occur. Successful breakdown at this level will bring the 50% Fibonacci retracement level into focus. This is the site of a previous support formed by the lows of August 21 and September 30 at 16.98.
On the other side of the coin, a push from the 17.37 support level could open the door for a challenge of the triangle’s upper border. A break above the triangle would open the door for a move towards 18.44 (September 12 high) in the first instance.