- Silver is trading 8% lower on Monday as the greenback kicks on.
- There has been an interesting chart pattern which has now been taken out.
Silver 4-hour chart
The greenback strength has hit commodities hard on Monday as most of the majors are lower. Silver, in particular, has had a tough session trading lower by over 8% at one stage. The dollar had been moving sideways for a while but after the Fed failed to provide the market with much confidence last week it seems the dollar bulls have jumped on board.
The key feature on the chart is the triangle pattern marked in black. Also, the red support area has been broken to the downside. Now it could be used as a resistance zone in the future. The next major support is at the blue line just above USD 22 per troy ounce.
The indicators have now turned bearish. The Relative Strength Index is now overbought and could pullback in the short term. The MACD is painting a very bearish picture, the signal lines and histogram are now under the zero level.
Overall, this looks like a major trend change. The market had been holding in a consolidation pattern but now the pattern has broken to the downside. If the price can break below USD 23 per ounce it would confirm the bearishness.
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