As observed on the XAG/USD chart today, silver prices have seen a decline of more than 5% over the past week. Similar bearish trends are also visible in gold prices. According to Reuters, traders are currently focused on upcoming economic data releases this week, which could shift market sentiment regarding a potential interest rate cut at the Federal Reserve’s September meeting.
Will silver prices continue to fall? Technical analysis of the XAG/USD chart reveals that since late May, silver has been developing a pattern that resembles a fan of three expanding lines, highlighted in red.
Bullish Factors:
- The price has breached the red median line and moved into the upper section of the fan.
- The price is currently near the bullish breakout point of the median line, which could act as support.
- On 2-3 September, bearish momentum eased, suggesting possible support, potentially reinforced by the lower boundary of the ascending blue channel.
- The price has reached the 50% retracement level of the bullish A→H impulse.
Bearish Factors:
- A bearish head and shoulders (H&S) pattern has formed near the key $30 per ounce level, although the downside potential from the neckline break has nearly played out.
As a result, there is a chance that bulls may attempt to regain momentum and drive the price back towards the $30 mark. The success of this scenario will largely depend on the upcoming fundamental developments. On Friday, 6 September, at 15:30 GMT+3, the release of US labour market data could have a significant impact on silver prices.
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