Following on from last week’s research highlighted in The Pattern Pulse, the local trendline resistance (taken from the high of $32.51) held ground, and consequently, spot silver (ticker XAG/USD) stepped beneath support at $30.73 (now marked as resistance) and completed a head-and-shoulders top formation (head at $31.75).

Subsequently, follow-through selling has been strong and largely one-sided, leading to the precious metal shaking hands with support at $28.86. As you can see, this level has been significant for a while now, and a breakout south of here, aided by the Relative Strength Index (RSI) venturing beneath the 50.00 centreline (negative momentum), would be noteworthy. It could trigger follow-through selling towards a decision point area at $27.00 and $27.54.

Adding to the RSI analysis, you will note that the momentum indicator also breached indicator support from 44.71, suggesting further downside momentum could be seen until reaching the oversold region (30.00).

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