XAG USD - It's an investment, enjoy the process

29 Ağu 2022

Monthly

• Silver and Gold has seen a large sell off from the imbalance created between $25-28 FL.
  
• The reason for this zone looking left showed a strong rejection monthly wick and a corrective phase over two subsequent months, allowing price to look for a pivot point tapping a weekly zone (use Fibonacci tool to align, using high $30.63 to bottom $23.96).
  

FL level on the weekly will break
To understand why this zone will break is for two reasons;

• Despite being a Fresh zone, the structure below has also been untested. Following the reactive departure height of the OL below between $12-15, has offered a high probability of rejection and using the zone as a base in the formation of a Drop base Drop.
  
• The imbalance here can allow lower time frame reactive buys from the level indicated using a weekly. However, the price action to this point has showed (looking at the structure left) of a poor price action and strong departure, meaning the sells have no obstacle when returning to the level formed.
  
  Using the rules of touches allows the buys to be placed. Rules applied here upon a second touch (as of 29th august start) shows a second tap of the weekly zone. Expect a lower low to be placed.
  

Four day

• The four day chart has shown a clear picture of a squeeze pattern, however noting on the four day a falling wedge pattern has occurred, creating an interesting moment where price can break out from a deep reactive test - moving price back up towards $26 as a fresh level. However, do not trade until a confirmation rule applies.
  
• The high curve (downward trendline) has shown no probability of turning bullish - the reason is the Weekly and Monthly structure shows the pathway for the arrival destination heading towards the OL at the Monthly.
  

Falling wedge - optional counter trade
Only where a reactive departure is created and breakout forms.


Daily

• Clear downward sell into the weekly FL, offering a deep corrective sell - note, price is now within the weekly zone and a DCA buy will now be a strong optional move as price is now considered "cheap" relative to Gold.
  
• Technicals, (scroll out) and look the structure left - price needs to move towards the weekly arrival point of $17.5 est - where price can pivot as here lies the price action zone which makes up the weekly departure move.
  Completing a head and shoulder pattern formation and will extend bearish into the desired move.