This is a potential shorter-term long play. On the 1H chart, XAGUSD is at an interesting level. The horizontal blue line indicates the previous swing low and it clearly acts as a that seems to hold. We can see a relatively nice downtrend with multiple swings, while the trend is now in the overextended territory as well (I haven't added levels, but it's well over 200% now).
However, it appears to be changing direction. From the past two trend waves, we can see that there's divergence. The initial test of support (after the French election result) was strongly bought but the market faded the push higher and wanted to go for another test. The second test of the went the same way up, visible by the strong bars that followed it. This created a , one of our favourite reversal chart patterns.
By now, this starts to look like a classic rounding bottom reversal. Currently, the price is testing lows again and I hope that it makes a higher low, as this would confirm our suspicion that a reversal is underway.
What I'm still waiting for is the momentum push upwards. A strong bar, potentially taking out some of the previous ones, would be the trigger for me to take a position. If the price does decide to move lower, we just do nothing. For now, as always, we're in waiting mode.
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