Silver (XAG/USD) Elliott Wave Structure Downside Bias Holds While Under $63 - Forex | PriceONN
Since forming the all‑time high at $121.6 on January 29, 2026, Silver (XAG/USD) has entered a pronounced correction. The decline has unfolded with a clear Elliott Wave structure, and the ideal extreme target remains the 100% Fibonacci extension at $38.8. Whether this level will ultimately be reached is uncertain, but the broader corrective sequence continues […] The post Silver (XAG/USD) Elliott Wave Structure Downside Bias Holds While Under $63 appeared first on ActionForex.

Silver's Downward Trajectory

A dramatic shift has occurred in the silver market since it achieved its all-time zenith of $121.6 on January 29, 2026. The precious metal has since been embroiled in a pronounced corrective phase. This downturn has not been random; it has displayed a distinct Elliott Wave pattern, a widely followed technical analysis tool.

The projected endpoint for this extensive correction remains the 100% Fibonacci extension level, calculated at $38.8. While reaching this precise target is not guaranteed, the prevailing corrective sequence strongly implies that further depreciation is on the cards. The market's structure continues to favor sellers, keeping a lid on any sustained upside momentum.

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Short-Term Dynamics and Wave Analysis

Focusing on the immediate trading landscape, the recent upward movement that peaked at $63.29 appears to have completed what technical analysts label as wave (B). This is clearly depicted on the one-hour charting, illustrating a pause before the next leg lower. Post this peak, the price action has resumed its descent, commencing wave (C). This new phase is unfolding internally as a series of five distinct waves.

Within this developing wave (C), the initial downward thrust, wave ((i)), concluded at $57.19. Subsequently, a counter-trend rally took hold, forming wave ((ii)) and topping out at $60.76. The market then turned south again for wave ((iii)), reaching a low of $56.84. Another corrective bounce followed, marking the end of wave ((iv)) at $59.67.

The current configuration strongly suggests that wave ((v)) is nearing its culmination. The completion of this sub-wave would, in turn, signal the conclusion of the larger wave 1 within the overall wave (C) structure. This is a critical juncture for silver traders.

Looking Ahead: Potential Rebound and Resumed Sell-Off

Following the anticipated completion of wave 1 of (C), the expectation is for silver to embark on a corrective rally, identified as wave 2. This rebound is designed to retrace part of the cycle that began from the high recorded on July 6, 2026. Such corrective waves typically resolve in either a simple three-swing pattern or a more complex seven-swing formation before the predominant downward trend reasserts itself.

The immediate price ceiling, or pivot, at $63.3 remains the key barrier. As long as silver prices stay below this critical level, any rallies are predicted to falter, likely forming corrective sequences. This reinforces the prevailing bearish sentiment and keeps the door open for silver to extend its decline towards lower targets.

Trader Takeaways

The persistent bearish structure in silver, particularly while prices remain capped below the $63.3 pivot, presents a clear signal for short-term traders. The detailed Elliott Wave count suggests that the current decline is part of a larger corrective pattern, aiming for the 100% Fibonacci extension near $38.8. While a temporary bounce in wave 2 is anticipated after the completion of wave ((v)), this is expected to be a corrective move, offering a potential opportunity for sellers to re-enter the market at better prices.

The implications extend beyond just silver. A sustained weakness in silver could correlate with a broader risk-off sentiment, potentially impacting other industrial metals like copper. Furthermore, movements in silver often have a leading or lagging relationship with gold prices, so monitoring XAU/USD will be crucial for context. The strength of the US Dollar Index (DXY) could also play a role; a stronger dollar typically exerts downward pressure on dollar-denominated commodities like silver.

Traders should remain vigilant for signs of exhaustion in the current downward wave ((v)). A decisive break above the $63.3 resistance would invalidate the immediate bearish thesis, suggesting a more significant corrective rally is underway. However, until such a break occurs, the bias remains firmly to the downside, with rallies expected to be sold into. The key risk is underestimating the potential depth of wave 1 of (C) or misinterpreting the corrective wave 2 bounce.

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