Yesterday’s market action confirmed all three setups described in previous Lab Notes with near-perfect precision
The broke down below key technical levels, while both and rallied directly into their projected upside targets. These price movements not only validate the outlined scenarios but also open the door for the next strategic decision points across metals.
Let’s start with the USD Index
Daily Chart
Yesterday’s close below the psychological barrier of 100 and the lower border of the green rising wedge carries strong technical and psychological implications: a close below them may signal a broader trend shift (however, only if follow-through selling confirms the break).
Today’s candle shows an attempted bounce back into the wedge – similar to the price behavior seen on Nov 13–14. But unless price closes back inside the wedge any optimism here remains premature.
On the indicator side, both CCI and Stochastics printed clean sell signals, increasing the likelihood of continued downside unless bulls reclaim lost ground quickly.
My takeaway: The daily chart signals a cautionary phase for USD bulls with 100 as the new battle line.
H4 Chart
From this perspective, we see that the index exited the orange consolidation zone to the downside and promptly fulfilled the minimum measured move, landing at the 50% Fibonacci level (exactly as predicted in yesterday’s Lab Note).
Indicators are now showing early signs of potential bullish divergence. If buy signals emerge here, bulls may reclaim control. In that case, a return to the lower border of the orange consolidation becomes likely, which would also invalidate yesterday’s breakdown under the wedge and re-open the path toward the November highs or even to the major resistance zone discussed in the previous Lab Note.
My takeaway: bears won the first round, but the bulls have a technical setup to fight back. If current bounce gathers strength, the invalidation of the breakdown could be a game-changer. However, if bulls hesitate or fail here, we may see continuation of yesterday’s decline to deeper Fibonacci levels (78.6% or lower). Therefore, in my opinion, the next 24h will likely determine who takes control.
Yesterday’s USD weakness gave precious metals exactly the breathing room they needed – especially silver, which responded sharply. Let’s now turn to the charts and examine how this played out…
Daily Chart
The most obvious development: price has rallied straight into a short-term resistance zone created by the bearish price gap that previously rejected bulls on November 19. Therefore, it wouldn’t be surprising to see sellers’ step in again – especially with multiple technical elements converging to defend their last line before the November high.
Psychologically, this is the kind of zone where very short-term traders tend to lock in profits, increasing the chances of a pause or short-term rejection.
H4 Chart
From this perspective, we see that yesterday’s pullback (after the U.S. market open) was sharp, but it landed exactly where it needed to… at the combination of the upper border of the red declining channel and the upper edge of the orange consolidation.
This double support zone held perfectly and became the launchpad for a continuation move into the north. The measured move projection from the orange consolidation mentioned was not only completed but extended into a cluster of major resistance levels, including:
- The 61.8% Fib retracement
- November 19 highs
- November 13 lows
- and the same bearish price gap noted on the daily chart
Indicators: CCI and Stochastics are firmly in overbought territory and RSI is approaching 70, which suggests buying momentum may be nearing exhaustion (a potential early warning to watch for divergences or bearish signals).
H1 Chart
The measured move following the earlier upside breakout from the pennant pattern (discussed in Lab Note #7) wasn’t just completed, but bulls pressed the advantage and pushed the price even higher. This kind of follow‑through typically signals strong underlying demand and suggests that buyers are still in control of the short‑term trend.
But…
As you see on the above chart, silver is now moving within two overlapping rising wedge patterns (green and gray). As a reminder, a rising wedge typically signals weakening bullish momentum – even if the price is still moving higher. It’s a classic warning pattern that often precedes a downside breakout as buyers lose strength and sellers start regaining control.
Additionally, the first signs of divergence are starting to show on CCI and Stochastic Oscillator, which, combined with the multi-layered resistance cluster just overhead could become a decision point.
Therefore, if sellers start stepping in and momentum wanes, a local reversal is possible.
In this case, the first downside target would be the lower border of the grey wedge (currently near 5172.50). A break below it would likely open the door for a test of the lower line of the green wedge (around 5135). If the bulls fail to defend that zone, the path toward 5059 becomes likely (a move equal to the height of the grey wedge) and we could even see a drop into the 5034–5049 range, which combines the previously broken upper line of the orange consolidation, yesterday’s low, and the 50% Fib retracement of the entire recent upswing (Nov 21–26).
My takeaways:
- Daily: silver is testing a strong resistance zone that has rejected bulls before – it’s a natural place for sellers to step in again.
- 4H / 1H: multiple formations have completed; momentum is stretched, and price is crowded near key resistance – this calls for caution and precision.
With silver testing key resistance and showing early signs of exhaustion, it’s time to check whether gold is following a similar script – or writing its own.
Daily Chart
Although gold managed to climb above the upper border of the green triangle, the red bearish gap remains in play. Until buyers succeed in closing it, the risk of another bearish attack and a slide back into the triangle formation persists.
What would confirm that bulls are truly serious about targeting 4250?
A daily close above both – the red gap and the green triangle would be the strongest signal. Until then, caution and laser-focused awareness are highly recommended.
My takeaway: the yellow metal is flirting with a bullish breakout, but without a proper confirmation candle, false optimism may prove costly.
1H Chart
The successful defense of the support area around 4150 triggered a continuation move toward the resistance area highlighted in yesterday’s Lab Note.
While this upward move is technically impressive, the combination of the red gap and horizontal resistance still poses a serious challenge. This is where bears may attempt to strike back – especially if momentum weakens.
Another key level to monitor today is the green rising support line based on recent lows. So far, it’s done a solid job deflecting sellers’ attempts, but if the price declines below it, the risk of a pullback to yesterday’s lows (and the 4150 zone) will likely increase significantly, particularly if indicators generate fresh sell signals.
My takeaway: bulls still hold the short-term advantage, but they’re running into a double wall of resistance. Now it’s on the buyers to prove they actually have the strength- until we see a decisive close above resistance, the risk of a fake breakout remains very high.
Summing up, the USD Index, silver, and gold are sitting at major technical crossroads. Today’s price action could define the next few days, if not weeks. The index is testing the kill zone for yesterday’s breakdown, silver is pushing into a heavyweight resistance cluster and gold is battling overhead supply from the bearish gap. My final thought for today? When multiple instruments approach critical levels at the same time, don’t chase. Let confirmation lead, not emotion.
Another dot connected. Another trail unfolding. See you on the next chart.
