The market just delivered its first meaningful shift in short-term balance.
The dollar failed to hold its breakout and is now testing whether the recent move higher was a true trend continuation or merely a temporary overshoot. At the same time, gold is stabilizing above a critical psychological level, and silver is attempting a technical breakout of its own. The next daily closes will determine whether this turns into a broader reversal or just another short-lived pause.
Dollar (DX.F): Breakout Failure Raises Downside Risk
Let’s start with yesterday’s quote:
“(…) If buyers regain momentum and push higher, the next upside targets include:
- the upper boundary of the rising channel near 97.99
- and potentially the 98.14 area, where the measured move projection of the wedge aligns with the unfilled downside gap from January 23 (…)’
Looking at the H4 chart, we see that bulls managed to reach yesterday’s initial upside target, but they failed to break above the upper boundary of the rising black channel.
More importantly, they were unable to hold the dollar above the previously broken February 5 high. This resulted in an invalidation of the earlier breakout. What followed was a consolidation phase that ultimately resolved in favor of sellers, with the dollar falling back below the previously broken upper boundary of the rising wedge.
Momentum indicators have now generated sell signals, reinforcing the bearish case and increasing the risk of further downside - especially if sellers manage to close a candle, and ideally the entire day, below the lower boundary of the orange consolidation near 97.61.
If this breakdown is confirmed, the path toward the lower boundary of the rising channel opens up. If bulls fail to defend that area (as they successfully did on February 18) the dollar may extend losses toward 97.22, which represents the minimum measured move of the consolidation breakdown, or even toward this week’s lows near 97.00.
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Silver (SI.F): Breakout Attempt Gains Attention
Silver has just delivered one of the most technically important developments among the three markets. Price has broken above the resistance zone defined by the short-term resistance line and the 8000 barrier - a level that had capped upside attempts in recent sessions.
If bulls manage to secure a daily close above this region, it would significantly strengthen the bullish case and open the door for a move toward recent highs.
However, there is one important caveat.
Momentum indicators on the H4 chart are already in overbought territory, which increases the probability of short-term consolidation or temporary pullback before continuation. This makes today’s close especially important for confirming whether this breakout has real structural strength.
Today’s Takeaway
The balance is shifting, but confirmation is still everything.
Dollar: the failed breakout increases the risk of further downside. A confirmed move below 97.61 strengthens the bearish scenario and opens the door toward lower support levels.
Gold: (…)
Silver: the breakout above 8000 is promising but needs confirmation. A strong daily close above resistance would validate the bullish continuation scenario.
Bottom Line: the next confirmed move will likely define the direction of the coming sessions.
Stay sharp, stay tactical and have a wonderful weekend!
Anna