On H4, we see that yesterday’s consolidation near the 61.8% Fibonacci retracement ended with a bearish victory, showing bulls’ weakness (they didn’t manage to push the price to the next upside target based on the double bottom formation).
As a result, sellers closed yesterday’s bullish gap, formed a daily bearish engulfing pattern and triggered continuation lower.
That negative technical combination pushed price below the key support area and into a test of the 8000 barrier and the 50% Fibonacci retracement of the February rebound.
Now things get technical.
Today’s move has taken silver below the lower boundary of the green rising wedge marked on H4. Therefore, if the daily close confirms this breakdown, bears will gain strong arguments to extend the correction toward 7000-7200 (where the previously broken red resistance line aligns with 78.6% Fibonacci).
However – and this is crucial – the true key that unlocks deeper downside is not just the wedge breakdown. It is the loss of the green bullish gap from last Monday (8234-8460).
Therefore, in our view, only a confirmed break below that bullish foothold will give bears open space to press south aggressively.
Today’s Takeaway
This is not a day for emotional positioning. This is a day for structured reaction.
Dollar: watch 99.30 into the close. If the day finishes above it, we’ll likely see momentum continuation toward 100. However, failure there, will translate into controlled pullback scenario.
Silver: watch daily close relative to the wedge and the 8234-8460 gap. As long as the price finishes the day above them, in our opinion, there is no aggressive short bias. However, a confirmed breakdown will likely open the way to around 7000–7200 in the coming day(s).
Final Thought: The dollar is testing strength, metals are testing support and one of them will win this round. The close will tell us which side holds control.
Levels are set. Now we let price decide.
For additional forecasts on gold (GC.F), click here.
Anna
