On January 14/2021 XAGUSD hit a confluence zone where the pair reversed lower. Price hit an area where different market patterns and technical levels aligned which allowed sellers to push silver lower. In the chart below it is clearly visible that on January 14/2021 price found resistance at the previous support zone (light blue) and also respected the Dynamic Resistance 200MA (purple). Other bearish market patterns also terminated in this area. Green bearish pattern triggered SELLS at the XA 1.27% Fib. retracement level and the pink bearish pattern triggered SELLS at the XA 1.618% Fib. retracement level. Both green and pink bearish patterns triggered SELLS in the Support/Resistance Zone and the 200MA Dynamic Resistance area. Price pushed lower and could now be forming another bearish market pattern (blue). Blue bearish still needs price to get below the XA 1.618% but not break below the XA 2.24%. For blue bearish pattern to be valid price needs to terminate in between these Fib. levels (XA 1.618-XA 2.24). If price terminates in between these levels and we get a reaction bounce higher then expect sellers to be waiting at the BC 0.50% where point D of the blue bearish pattern terminates and triggers SELLS, which will also be near the next Support/Resistance zone. Only a move above the January 14/2021 high will invalidate the pattern or a move below the XA 2.24% with no bounce could also invalidate the pattern. Price does not need to bounce and XAGUSD can just continue lower. But if the pair does bounce from the proposed Fib. level area, you now know where the next possible SELL area could happen with a target level at 23.90. Only time will tell what silver will do.
XAGUSD 1 Hour Chart January 17 2021
Of course, like any strategy/technique, there will be times when the strategy/technique fails so proper money/risk management should always be used on every trade. Hope you enjoyed this article and follow me on Twitter for updates and questions> @AidanFX or chat me on Skype > EWF Aidan Chan
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