Will $XAG Shine On The Back Of A Rusting $XAU? | $GLD $SLV

Traders,

I just posted a chart illustrating the persistent increase in XAUUSD strength relative to XAGUSD (See original chart and analysis here: tradingview.com/v/dHewwmO7/ , as well as subsequent comments here: tradingview.com/v/w6G3CwDJ/ ).


XAUUSD vs. XAGUSD:

This strengthening of Gold relative to Silver might appear counter-intuitive, considering that the yellow metal has been under pressure recently, yielding to this BEARISH analysis, where it is expected to continue a downward course on a pure technical basis - See analysis and forecasting here: tradingview.com/v/KgNpTMbq/ .


XAUUSD ON ITS OWN:

Looking at XAUUSD alone, the technical landscape calls for a high-probability rally at the H4 scale. While this is a new chart without any prior target, I won't take credit for defining the current (YELLOW) level as a high-probability target, since it already occurred. However, I can say with some confidence that any protracted downward pressure will require a relief rallying to levels capped by the Fibonacci values depicted in the chart, with green, yellow and red representing a decreasing range of probability that price would attain these values. So, expect a higher probability of reversal to 19.754 (representing a minor Fibonacci value (1.000 - 0.786 = 0.214).

The other two values (20.308 at 38.2% and 20.653 at 61.8% retracements are self-explanatory, being significant Fib levels, widely accepted across financial markets).


PATTERN ANALYSIS:

The dominant pattern at this point remains arguable. A Bullish Bat comes to sight, as well as a potential Bullish Alternate Bat. However, their respective Point-B lacks the depth at 20.653.

Conversely, a Shark could win our consideration here, on the basis of the X-A-B conditions met at the apex of the pattern (i.e.: AB < 1.618), while a Zero-X 1.131 extension would fit the predictive model that defined TG-Lo = 18.435 today.


PREDICTIVE/FORECASTING MODEL:

As just defined, model just define an extremely LOW probability of reaching TG-Lo = 18.435 , but if it did so, this level would act as a strong reversal springboard. A colored arrow of fading quality is used to reflect the fading probability of this bearish scenario.


OVERALL: An abysmal target would support prior analysis of XAUUSD vs. XAGUSD rising. While price consolidates at current implied target, I will leave the directional indicator as "Neutral" until a direction pronounces itself.

Cheers,


David Alcindor
Predictive Analysis & Forecasting
Denver, Colorado - USA


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Twitter: 4xForecaster
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