XAG/USD Elliott Wave technical analysis [Video]

Silver Elliott Wave analysis

Function -Trend.

Mode - Trend.

Structure -Zigzag for wave 2.

Position - Wave 2 of (5).

Direction - Wave 2 of (5) is still in play.

Details - The sharp decline on Friday meant wave 2 will reach lower levels at 29.07-28.128 Fibonacci range as a double zigzag structure emerges. However, the upside is still expected to be favored if wave 2 ends above 26.023 and especially above 29.54. Same interpretation as the previous update.

After a sharp continuation of the year-long bullish trend in May 2024, Silver has been pulling back since May 20th in a corrective structure. Despite this pullback, the long-term trend remains bullish, suggesting that prices should continue higher once the correction is complete. This analysis identifies the potential reversal price zone where buyers can expect the next rally to begin.

Long-term analysis

The long-term bullish sequence for Silver began at 11.645 in March 2020. This sequence could potentially complete a double zigzag with a 100% target at 37, and possibly extend further to 48.3. If Silver breaches the 48.3 level, it increases the likelihood that the sequence will turn into an impulse wave. Whether the sequence becomes an impulse or remains corrective is not crucial at this point since both scenarios project further rallies. An impulse wave scenario has a higher target, indicating a much higher ceiling for Silver in the long run.

Daily chart analysis

The current bullish impulse cycle started in January 2024 and is extending higher in the intermediate degree. Price is currently in wave (5). The surge from May 3rd is significant enough to be considered part of wave (5). However, there is no divergence with the RSI between the peaks of wave (3) and the supposed wave (5). This lack of divergence suggests that the current dip might be wave 2 of (5), meaning wave (5) could extend similarly to wave (3). Given the potential long-term target for Silver, this extension is plausible.

Four-hour chart analysis

On the H4 chart, wave 2 is evolving into a double zigzag pattern and could find support within the 29.075-28.128 Fibonacci zone, where wave 3 could begin. The invalidation level for this scenario is at 26.023. However, traders should also watch for a breach of 27.54, which could signal an earlier need to adjust the outlook to a much deeper bearish correction from the May 2024 high.

Summary

Silver is currently in a corrective pullback within a long-term bullish trend. The long-term sequence, which began in March 2020, projects potential targets of 37 and possibly 48.3. The current cycle, which started in January 2024, suggests that wave (5) could extend higher. The H4 chart indicates that wave 2 might find support within the 29.075-28.128 Fibonacci zone, with an invalidation level at 26.023. A breach of 27.54 should prompt traders to consider a deeper bearish correction. Overall, Silver remains bullish in the long term, with the current pullback expected to give way to further rallies.

XAG/USD Elliott Wave technical analysis [Video]