Silver meets buyers at $40 50 and remains in range, with $41.45 high on sight.
A softer US Dollar is providing support for precious metals on Monday.
A potential double top at $41.45 migh be anticipating a deeper correction.
Silver (XAG/USD) has reversed losses after bouncing at $40.50 earlier on Monday, with price action returning to levels right above $41.00. The precious metal, however, remains within previous ranges, consolidating gains after a 10% rally in the previous two weeks.
Precious metals are drawing support from a weaker US Dollar on Monday, on the aftermath of another downbeat US Nonfarm Payroll’s reading that cemented expectations of Fed cuts next week, bringing the possibility of a jumbo cut back to the table.
Technical Analysis: Potential double top at $41.45
The technical picture shows a consolidation pattern, which has brought the 4-hour Relative Strength Index down from overbought levels. The support area around $40.50 is holding bears for now, but the double top at $41.45 area should act as a warning for bulls.
The pair is testing intra-day resistance at the $41,00 rea right now, ahead of the mentioned $41.45 area. A confirmation above here opens the door for the $42.30-$ 42.35 area, the 261.8% Fibonacci extension of the mid-August rally, which is a common target for Elliot Wave cycles.
To the downside, a break below $40.40 confirms the mentioned double top. Further down, the September 2 low, at $40.15, might hold bears ahead of the $39.50 intra-day level. The DT’s target is the August 29 low, near $39.10.
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