Patterns: XAG/USD, USD/ZAR

XAG/USD 1H Chart: Descending channel in sight


Silver has been appreciating against the US Dollar after the currency pair reversed from the lower boundary of a medium-term descending channel located circa 14.00.

As apparent on the chart, the exchange rate is re-testing the upper channel line near 14.65. From a theoretical point of view, the pair should reverse and drop to the 200-period (4H) SMA in the nearest future, currently located at 14.40. Technical indicators for the 1D and 1W time-frames also suggest that bearish momentum might occur soon.

If given channel does not hold, it is expected that a breakout could occur. In thic case, potential upside target might be the monthly S1 at 14.90.


USD/ZAR 1H Chart: Upside potential apparent


Downside risks has been dominated the USD/ZAR exchange rate since the pair reversed from the upper boundary of a medium-term ascending channel at 15.47.

During this week the currency pair has been trying to surpass the resistance cluster formed by a combination the weekly and monthly PPs, as well the 55-, 100-, 200-hour SMAs and the Fibonacci 23.60% retracement in the 14.60/14.71 range. Technical indicators for the long term suggest that a breakout of given resistance cluster might happen in the nearest future.

However, this advance might not be immediate, and the pair could decline to the weekly S1 at 14.26 within following trading sessions.

This overview can be used only for informational purposes. Dukascopy SA is not responsible for any losses arising from any investment based on any recommendation, forecast or other information herein contained.