I see two (2) possible plays to tackle the potential movement of the spot price of silver or the XAGUSD pair. As you can see from its chart, silver or gold’s Robin has been trading within a rectangle with a support at 19.000 and a resistance at 20.500 for a little more than 2 months now. As it moves higher, it may likely hit a wall at the 20.50 marker. A failure to clear 20.500 may frustrate the longs and send the commodity back to the lower part of its range. Given its general downtrend, it is likely that the XAGUSD pair may indeed bump its head and then fall after it hits a resistance at 20.500. Meanwhile, a jump over 20.500 may trigger a breakout from a double bottom pattern and send it to a minimum upside target of 22.000.
Given silver’s present set-up, I’d be looking to short it first at 20.500 with a target at 19.00 and a stop loss at 20.65. I’d be looking to reverse my trade quickly and go long instead if the pair successfully breaks the mentioned resistance. At the same time’ I’d place a buy stop order at 20.650 with a target at 22.00 and a stop loss at 20.30.
For those who are interested in technical analysis or learning how to profit using charts, we have an upcoming Technical Analysis Course on February 22 – 23, 2014. For more information, you may send us a direct message here or text/call (+63) 917 899 90 09.
New to Forex trading? Open an account with IronFx now (kindly click here) and receive a 60% trading bonus on your initial deposit*!
*terms and conditions apply