Descending triangle formation
The size of the descending triangle suggests that silver may be in for a period of consolidation, assuming the structure holds up. Typically, a breakout is anticipated before the pattern reaches about three-quarters completion towards the vertex. A significant drop below $31.65 could indicate a breakdown from this declining triangle, potentially pushing silver towards a 50% retracement level around $31.00 or a 61.8% Fibonacci retracement threshold. Resistance levels include the upper trend line of the pattern and the recent lower swing point at $33.24.
Is another pattern possible?
If a sell signal emerges, several other scenarios could unfold. Given the current arrangement of the pattern, a fall below $31.65 might transform it into a bullish falling wedge.
Bulls leading before potential consolidation
The current advantage may favor the formation of either a bull flag or a wedge pattern. Following a rally of $5.36 or 18.9% that concluded in just 11 weeks at $33.68 starting April 23rd, we might see similar aggressive buying at the next meeting, depending on prevailing patterns. Regardless, it seems these strong purchases could linger at the lower end for some time, with buyers focused on silver and ongoing accumulation.
For all economic events happening today, refer to the Economic calendar.
