- Summary:
- Silver prices continue their upsurge as new coronavirus fears have enveloped the market today. XAGUSD is now testing a key resistance level.
Full risk-off sentiment this Monday as a result of new coronavirus fears is allowing silver prices to extend gains for yet another trading session, marking the 7th out of 8 trading sessions that silver has traded higher. Silver price has continued its upside move by 25 cents on the day as reports of an explosion of coronavirus cases in Italy, Iran and South Korea sparked renewed interest in safe-haven metal assets.
Silver prices are now at levels not seen since 5 September 2019 as bulls continue to receive impetus to create more demand on the white metal, as fears of a global coronavirus pandemic continue to spook markets.
Silver prices are highlighted on the XAGUSD pair, which is now trading at 18.17235, having tasted intraday highs at 18.90744.
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Technical Outlook for XAGUSD
The break of the bullish flag pattern has allowed silver price action to breach the resistance at 18.14680 very comfortably. The appearance of the hammer close to the next opposition level on Thursday threatened to checkmate the upside. Still, the market fundamentals overwhelmed this candle and forced the continued surge in silver prices. Today’s price surge was able to touch off the high of the 8 January candle at 18.85875, even as it violated the resistance at 18.65367. However, the daily candle is still open; therefore, this violation of 18.65367 is not a confirmed breakout.
We need to see two successive daily candles penetrate 18.65367 to the upside and close above it to confirm the break of this price level. If this succeeds, we also need to see 18.85875 give way to the same upside confirmation parameters before 19.37238 can become a realistic upside target.
On the flip side, failure to fulfil the upside breakout parameters listed above may allow prices to pull back from 18.65367, in which case the 18.14680 price level becomes relevant as new support in a role reversed flip.