Silver (XAG/USD) has decisively broken out of the descending channel it was in during the second half of May and June. This is a bullish sign and suggests the pair is now in a short-term uptrend. Given that "the trend is your friend" the odds favor a continuation higher.
A further bullish sign is that Silver is probably forming a Measured Move (MM) price pattern. MMs are composed of three waves, sometimes labeled A,B and C; they resemble large zig-zags.
Interpreted as an MM, the rally during the start of May could be considered its wave A, the whole of the falling channel its wave B, and the breakout from the channel, the start of wave C.
As a minimum, wave C will probably reach the 0.618 extrapolation of wave A at $32.75. If wave C is the same length as A – as is often the case – then it could reach $35.00.
Silver has also now broken above a major resistance level at the top of a four-year consolidation zone, a further longer-term bullish indication.
Source : Fxstreet
