Is Silver/Euro Set Up for an Historic Move?

This week, we'll look at a long-term chart of Silver/Euro with reasonable optimism that a very large move higher is in its future. First we can see that price has been defined by a very large consolidation channel that was entered into back in 2010. Within that channel, I have noted the three major consolidations: a topping pattern that formed during 2011-2012, a major basing pattern between 2013-2020; and more recently a consolidation that took place between 2020-2024. Important to note is that each consolidation was followed by a major impulse move. I have annotated these consolidation patterns to illustrate a truism of technical analysis: very often, large consolidations are followed by large impulsive moves in price. It would be very reasonable to conclude then, should price exit its much larger 15-year channel, a proportionate impulse move would follow. Adding to our optimism is the current flag that is building below the upper rail - generally bullish behavior. In fairness, however, whether this is a consolidation pattern that launches price out of the channel or a topping pattern that sends price lower can only be known once we see which direction it breaks.

For those looking for early clues about Silver/Euro's most recent consolidation and what it means for its future price direction, the chart of Gold/Euro might provide a clue. Here, we see that price too can be defined as a 15-year consolidation channel. The key difference though is that Gold/Euro has already broken out to the upside earlier this year. It is now consolidating those gains just above the upper rail, perhaps waiting for Silver/Euro to play catch up. Precious metals investors know that whatever direction gold trades, silver eventually follows. If the recent breakout in Gold/Euro is the real deal, then Silver/Euro can look forward to an explosive move higher in the months ahead.