Patterns: XAG/USD USD/SGD
|XAG/USD 1H Chart: Decline still in sight
Silver had been moving sideways against the US Dollar since mid-July with a diminishing trading range. As a result, symmetrical triangle was formed within a more senior pattern—a descending channel valid since the beginning of June.
This triangle was breached today. Such bearish breakouts are usually followed by a retracement from the breached pattern and a subsequent fall. Technical indicators demonstrate that there is still some downside potential in the market before bulls are able to prevail in the market once again.
The nearest support is the monthly S1 at 15.08; however, this decline is expected to be more significant, thus setting the 14.80 mark as a possible near-term target. Meanwhile, Silver bulls should look for buy signals, as such falls are followed by price surges.
USD/SGD 1H Chart: Correction expected after surge
Following a three-week period of consolidation, the US Dollar finally managed to pick up momentum against the Singapore Dollar on Thursday and consequently advance 1.10% within two trading sessions. This move happened after the pair reached the upper boundary of two different-scale channels.
By mid-Monday, the Greenback had reached the upper boundary of the junior channel and the 50.00% Fibonacci retracement near 1.3780. This short-term appreciation has pushed technical indicators in the overbought territory. This means that a correction south is likely to occur soon.
Even if bulls still move the rate higher during the following hours, the bearish sentiment should take over the market later in the week and target the 55-, 100– and 200-period (4H) SMAs at 1.3650. The bottom boundary of the senior channel is likewise located there.
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