Silver (XAG/USD) - Major Double Top Formation | Weekly Timeframe Analysis
🔷 Technical Pattern Overview
The weekly chart of Silver against the US Dollar (XAG/USD) reveals the formation of a textbook Double Top pattern, signaling a potential major bearish reversal. This pattern reflects market psychology — buyers attempted twice to push the price higher but failed both times, highlighting exhaustion and paving the way for a deeper correction.
Top 1 occurred around $33.50-$34.00, with significant rejection, indicating strong resistance.
After an intermediate pullback into the support zone ($30.50-$31.00), bulls attempted a second rally.
Top 2 formed slightly lower than Top 1, showing lower momentum and a failure to create a higher high — a clear bearish signal.
Following the second top, price action turned sharply bearish with large-bodied red candles, increasing selling pressure.
🔷 Key Structural Levels
Resistance (Sell Zone):
$33.50 – $34.00
This zone acted as a ceiling twice, validating its strength. Sellers aggressively defended this area.
Support (Breakdown Zone):
$30.50 – $31.00
Serving as a neckline for the double top. A confirmed weekly close below this area will trigger further bearish momentum.
Stop Loss (SL):
$36.40
Placed safely above previous highs to allow room for volatility and avoid fakeouts.
Take Profit 1 (TP1):
$26.96
Based on the measured move of the double top’s height projected downward.
Final Target (TP2):
$25.23
Major historical support zone from previous price action in mid-2023, adding confluence to the target.
🔷 Trade Strategy Plan
Short Entry Trigger:
Confirmed breakdown and weekly candle close below the $30.50 support zone.
Ideal scenario includes a break–retest setup, where price retests the broken support as resistance, offering a safe short entry.
Risk Management:
Stop Loss at $36.40, above structure highs to protect against surprise bullish rallies.
Profit Strategy:
First TP at $26.96 to secure partial profits.
Move Stop Loss to Breakeven after TP1 hit.
Final TP at $25.23 for maximum reward potential.
Risk-Reward Ratio (RRR):
Highly favorable (above 2.5:1), making it a strategic trade from a risk management perspective.
🔷 Market Psychology Behind the Pattern
Double Top Formation:
A double top is a result of buyers losing strength after two failed attempts at breaking higher. Sellers gain confidence as bulls tire, leading to a potential trend reversal.
Volume Confirmation:
An increase in sell-side volume on the break of support will strengthen the pattern's validity.
Sentiment Shift:
This formation hints at a broader sentiment shift in the precious metals market, likely driven by macroeconomic forces like stronger USD, interest rate policies, or deflationary pressures.
🔷 Additional Technical Observations
Bearish Divergence:
If examined on oscillators like RSI or MACD, it’s likely there is a bearish divergence developing between Top 1 and Top 2 (weaker momentum on Top 2), further confirming downside risk.
Trendline Break:
A major uptrend line since early 2024 has been breached during the second rejection, indicating a transition from a bullish to a neutral/bearish phase.
Fibonacci Confluence:
The 50%–61.8% Fibonacci retracement levels align closely with the $26.96 and $25.23 targets, offering additional technical validation.
🔷 Macro Factors to Watch
Federal Reserve policies (interest rates direction)
US Dollar Index (DXY) movements
Inflation and commodities cycle (silver as an industrial and safe-haven metal)
Global economic data influencing precious metals demand
🔥 Summary
The Double Top on Silver (XAG/USD) signals a major trend reversal opportunity for traders and investors.
Given the clear rejection at resistance, critical support testing, and confluence with multiple technical tools, this setup offers a high-probability bearish trade with excellent risk-reward dynamics.
A break below $30.50 could open the doors for a strong decline toward $26.96 and $25.23.
🔔 Patience is key: wait for confirmation with a breakdown and retest before entering. Trade safe!
🔷 Technical Pattern Overview
The weekly chart of Silver against the US Dollar (XAG/USD) reveals the formation of a textbook Double Top pattern, signaling a potential major bearish reversal. This pattern reflects market psychology — buyers attempted twice to push the price higher but failed both times, highlighting exhaustion and paving the way for a deeper correction.
Top 1 occurred around $33.50-$34.00, with significant rejection, indicating strong resistance.
After an intermediate pullback into the support zone ($30.50-$31.00), bulls attempted a second rally.
Top 2 formed slightly lower than Top 1, showing lower momentum and a failure to create a higher high — a clear bearish signal.
Following the second top, price action turned sharply bearish with large-bodied red candles, increasing selling pressure.
🔷 Key Structural Levels
Resistance (Sell Zone):
$33.50 – $34.00
This zone acted as a ceiling twice, validating its strength. Sellers aggressively defended this area.
Support (Breakdown Zone):
$30.50 – $31.00
Serving as a neckline for the double top. A confirmed weekly close below this area will trigger further bearish momentum.
Stop Loss (SL):
$36.40
Placed safely above previous highs to allow room for volatility and avoid fakeouts.
Take Profit 1 (TP1):
$26.96
Based on the measured move of the double top’s height projected downward.
Final Target (TP2):
$25.23
Major historical support zone from previous price action in mid-2023, adding confluence to the target.
🔷 Trade Strategy Plan
Short Entry Trigger:
Confirmed breakdown and weekly candle close below the $30.50 support zone.
Ideal scenario includes a break–retest setup, where price retests the broken support as resistance, offering a safe short entry.
Risk Management:
Stop Loss at $36.40, above structure highs to protect against surprise bullish rallies.
Profit Strategy:
First TP at $26.96 to secure partial profits.
Move Stop Loss to Breakeven after TP1 hit.
Final TP at $25.23 for maximum reward potential.
Risk-Reward Ratio (RRR):
Highly favorable (above 2.5:1), making it a strategic trade from a risk management perspective.
🔷 Market Psychology Behind the Pattern
Double Top Formation:
A double top is a result of buyers losing strength after two failed attempts at breaking higher. Sellers gain confidence as bulls tire, leading to a potential trend reversal.
Volume Confirmation:
An increase in sell-side volume on the break of support will strengthen the pattern's validity.
Sentiment Shift:
This formation hints at a broader sentiment shift in the precious metals market, likely driven by macroeconomic forces like stronger USD, interest rate policies, or deflationary pressures.
🔷 Additional Technical Observations
Bearish Divergence:
If examined on oscillators like RSI or MACD, it’s likely there is a bearish divergence developing between Top 1 and Top 2 (weaker momentum on Top 2), further confirming downside risk.
Trendline Break:
A major uptrend line since early 2024 has been breached during the second rejection, indicating a transition from a bullish to a neutral/bearish phase.
Fibonacci Confluence:
The 50%–61.8% Fibonacci retracement levels align closely with the $26.96 and $25.23 targets, offering additional technical validation.
🔷 Macro Factors to Watch
Federal Reserve policies (interest rates direction)
US Dollar Index (DXY) movements
Inflation and commodities cycle (silver as an industrial and safe-haven metal)
Global economic data influencing precious metals demand
🔥 Summary
The Double Top on Silver (XAG/USD) signals a major trend reversal opportunity for traders and investors.
Given the clear rejection at resistance, critical support testing, and confluence with multiple technical tools, this setup offers a high-probability bearish trade with excellent risk-reward dynamics.
A break below $30.50 could open the doors for a strong decline toward $26.96 and $25.23.
🔔 Patience is key: wait for confirmation with a breakdown and retest before entering. Trade safe!
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