Silver trades at $61.40 on the five-hour chart, consolidating below $61.98 resistance as an 80%-complete bear flag pattern builds after the metal's drop from $71.16. Friday's US jobs report, and wages in particular, could decide whether the metal breaks below its wider $58.68-$60.00 support zone or reclaims $62.30.
Bear Flag Nears Resolution
Silver has spent the last several sessions moving sideways after plunging from the $71.16 high, a classic post-breakdown consolidation. The pattern now forming is a bear flag that is 80% complete, with price attempting to stabilize above its 20-period moving average while staying well below major resistance.
The SuperTrend indicator sits down at $63.12, and price has held beneath the 50-SMA at $63.90, keeping dominant pressure to the downside. However, the MACD is flipping less negative at -0.70 versus -0.86, and RSI has bounced to 43.83 from oversold. A doji candle at $61.425 hints at indecision. The Ichimoku cloud base and swing high at $61.98-$62.11 is where the next move gets decided.
Dollar Index and Wages Share the Same Catalyst
Silver is trading the opposite side of a macro bet also visible in the Dollar Index, which is pressing toward a 102.77-103.00 resistance zone after clearing its prior 101.800 high. September payrolls are expected to slow sharply from 162K to around 90K, while unemployment is seen unchanged at 4.1%. Average hourly earnings are forecast to rise 0.3% m/m and 3.2% y/y, up from a 3.1% annual pace.
That composition matters because Thursday's ISM Manufacturing report showed Prices Paid surging from 71.1 to 77.9, complicating the Fed's inflation picture. A strong payroll print combined with hot wages would challenge recent reductions in October hike expectations, supporting the dollar and adding pressure on silver.
Levels That Decide the Next Leg
Silver's decline from 71.16 extended to 59.93 before stabilizing near the psychological 60 level. The broader support zone sits at 58.68-60.00, built from the 100% projection of the decline from 71.16 to 62.30. A decisive break below 58.68 would expose the prior 54.77 low, followed by the 53.20 area.
On the upside, bulls need a close below $60.26 ruled out and a move back above $61.98, validated on a close above $62.11. Until silver reclaims 62.30, stabilization near 60 remains just that — stabilization.
Sources: Investing.com, ActionForex
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