Silver Bullish Cypher Pattern

Silver has been trading to the downside in the past few weeks going from a high of 18.64 to yesterday's low of 16.37. What's more interesting is that for the past 140 days the precious metal has been creating a formation called bearish cypher pattern.

The pattern is still in process, but we are very close to verifying it. According to the pattern, the price should go just about 0.618 in the midmove and then create a quick move to the upside. The move ended in the middle of April and then the downward move started.

Currently, we are just a few points shy of validating the pattern. Silver needs to go to 16.25 in order for the pattern to be confirmed. Should this occur, heavy buying could be the market participants' response.

Right now we are at 16.47, a bit higher than yesterday's low, but still in the area of completing the formation.

Chart: XAG/USD H4