The analysis on Silver XAGUSD is going to be a bit long and will be from the perspective of multiple time frame, namely different 1234 formation from different timeframe.
On Monthly chart, we are above a 1234 pattern
However, because xagusd is a down trend, we do see another 1234 pattern evolving, that upon a close below the red dotted line drawn, the down 1234 will form
A day chart analysis into the 1234 shows an up flow with a smaller 1234.
A EWUS setup appears, however, in an EWUS setup, it is important to note that it is a fishing strategy. Therefore, a stop loss or trade management is very important. If price closes below F7, this would deem that this EWUS strategy has failed. XAGUSD is not mapping out an IHS, but potential a double bottom, where the stronger support will be near to 20.50. This would be a huge loss in term of pips.
Update (19 March 2014 by Jerome)
- With price moving below the EWUS level, it is now approaching the next support zone.
- For price to have a chance of continuing up, it is important for it to stay above the support.