Silver Price Forecast: XAG/USD breaks above $36.90, confirms a Bullish Flag

LONDON (June 18) Silver (XAG/USD) broke above the top of a descending channel from early-June highs, favoured by higher safe-haven demand on risk-off markets, and has confirmed a bullish flag.

The fundamental context remains supportive with safe assets favoured as the war between Israel and Iran extends, with the US President Trump tempted to jump in and turn it into a regional conflict of unforeseeable consequences. Precious metals are likely to remain buoyant until geopolitical tensions ease.

The focus today is on the Federal Reserve, which is highly likely to keep interest rates on hold but will release fresh economic and interest rate projections that may have a significant impact on the US Dollar.

XAG/USD: The next resistance is at $37.85

From a technical perspective, the 4-hour chart shows that the pair ended its correction from June 9 highs on Tuesday, breaking above the $36.90 level and resuming the broader bullish trend

The next resistance level is now at the 161.8% Fibonacci extension of the June 9 to June 11 correction is at $37.85. Above here, the next target is the area between the 261.8% extension of the mentioned range, at $39.35, and the Bullish Flag’s measured target, at $39.55.

The 4-Hour RSI is reaching overbought levels, which might lead to some consolidation or a correction. The previous resistance, at $36.90, and the reverse trendline, now at $36.50, are likely to act as support.

FXStreet