Silver Analysis Since mid-2023, the daily chart of the XAG/USD pair has been following a strong long-term uptrend characterized by higher highs and lower lows. The main feature of the chart is a clear long-term ascending trend line with several connecting points that act as dynamic support. This trend line has proven to be a solid base for bullish momentum. The price has held this line several times, each time reaching new highs after a breakout. This pattern confirms the uptrend in the silver market with continued buying at lower levels, reflecting positive market sentiment. The price recently made a significant breakout, breaking out of the last daily candlestick resistance levels and is currently trading around $36.00. This new candlestick is of particular interest. It is a strong Engelvin rally candlestick with a long body and a small upper wick, indicating strong buying pressure throughout the session. This not only invalidates the last bearish pattern, but also shows the continuation and strength of the current uptrend. Typically, a large bullish candlestick after a sideways or corrective phase signals the start of a new uptrend. This is the case here. Analysis of the price action prior to this breakout clearly shows that the market has been forming a long-term sideways range between approximately $31.00 and $34.50. This sideways range has formed a buying zone where each decline has been followed by a rapid and gradual recovery. This is an early sign that demand is gradually outpacing supply. The breakout of $34.50, which has been a resistance level for several weeks, indicates a significant technical change. This range is now turning into support, and a return to this level could trigger significant buying by buyers eager for a correction. Furthermore, the candlestick prior to the breakout was a relatively small bullish candlestick with a faint upper shadow, indicating that day traders were initially hesitant or hoping to take profits. However, the close near the high indicates that buyers have not lost momentum. The new breakout candlestick confirms that the previous trading session was a starting point, not a reversal. In technical analysis, a strong bullish candle that closes near the highs usually strengthens and accelerates the momentum of a trend. This chart reflects this perfectly, and the breakout was very clear. In terms of trend structure, each corrective sell-off was relatively controlled and short-lived, perfectly aligned with the uptrend line. This trend line is structurally significant, having been tested and validated at least four times in the last year. This consistent movement around the trend line suggests that buyers are entering the early stages of selling, a characteristic of a strong uptrend. It is important to note that the slope of the trend line has been slightly increasing over time, indicating increased buying, especially since March 2025. Looking ahead, we can expect immediate resistance just above the current market price, near the psychological resistance level of $37.00. If the uptrend continues, a clear break above $37.00 could pave the way for a long-term price range between $38.50 and $40.00. Conversely, if the price were to fall, support would first be found at the all-time high of $34.50 and then at the current trendline of $32.50. If this trendline is clearly broken, the current uptrend will reverse, but as long as the price remains above this line, the trend will remain intact. The Relative Strength Index (RSI) is currently in overbought territory, near 72, indicating potential sideways movement or a short-term downtrend. However, in a bullish market, the RSI could remain in overbought territory for an extended period. Similarly, the Stochastic indicator is above 89, which does not necessarily indicate a trend reversal, but could indicate short-term market tension. The MACD histogram is showing increasing bullish momentum. The MACD line is moving away from the signal line, another sign of continued trend strength. In short, the current structure of the daily chart for the XAG/USD pair remains bullish. Current candlestick patterns indicate a strong breakout and a clear price continuation. While indicators point to a potential overbought market in the short term, the price structure, stable trend line, and recent candlestick patterns support the upside. Traders should monitor dips to $34.50 and $32.50 as potential reversal zones. As long as the momentum holds, the upside target above $37.00 remains valid.
