Over today's Asian and European trading sessions, XAGUSD witnessed a significant break below the volume profile value area at $22.65. Despite a brief rebound following the break, the market is currently testing the previous swing high, with key resistance identified at $22.76 (blue rectangle).
The EMA 50 and 200 are on the verge of forming a death cross, a bearish reversal confirmation. To invalidate this signal, prices must breach above the upper bound of the value area at $23.06 and the descending trendline.
Despite the recent four-day bearish rally, the slope remains gradual, indicating potentially weaker bearish pressure. A death cross on the EMA 50 and 200 may therefore provide a false signal unless accompanied by significant bearish candlestick patterns or Marubozu candles. The Fibonacci retracement suggests XAG/USD may establish a new low at the 61.8% retracement level before finding support or rebounding.
Oscillator indicators further support the bearish sentiment, with both the MACD and RSI signaling downwards. The MACD's signal line resides below the 0 line, while the RSI remains trapped below the 60% level. This indicates potential momentum for prices to reach the 61.8% retracement level, with the RSI likely to become overbought at this point.
Forecast -0.2% vs Previous -0.4%
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