Watch 2013-low for resistance
This is a previous psychological-low and until overtaken, XAGUSD belongs to a year-year downtrend.
Price action last night confirms that the level is now resistance since price recoiled from level.
On the other hand, month-month and week-week trends are up for XAGUSD. Price reaction to level comes from profit taking and until a reversal pattern emerges, there is no reason to turn bearish.
Simple conclusions to draw from charts
- Week-week trend UP
- Month-month trend UP
- Year-year trend DOWN which this level (2013-low) has to be overcome to change this leg
A simple exercise that readers can do using MT4:
- Visit both XAUUSD and XAGUSD on ‘W1’ or ‘MN’ higher time frame.
- Inspect year-year action.
- Discover that both precious metals started making new-year-low in 2013 compared to previous year.
- Use 2013-low as hurdle for both metals and compare that hurdle to where price is trading for both right now.
- Realise that XAGUSD is still below and has to fight 2013-low which XAUUSD has already overcome.
- Conclude that XAUUSD is technically stronger than XAGUSD.
Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’. Operates multiple strategies.
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