Silver (XAG/USD) is trading at $77.31 on April 8 and is forming a cup pattern on the 12-hour chart with a breakout estimate of 32%, making triple-digit levels possible.

This setup comes at the same time as the ceasefire between the USA and Iran caused the Brent oil price to fall by 15%, and the US Dollar Index (DXY) fell 1.63% from the peak on April 6. A weaker dollar traditionally lifts the silver price because the metal becomes cheaper for foreign buyers. Whether this macro advantage leads to a confirmed breakout depends on how the handle is formed, and whether the futures market supports it.

Silver price forms a cup while RSI shapes the handle

Silver price has formed a cup pattern on the 12-hour chart since mid-March. The rounded bottom took shape through the correction late in March, and the recent upswing has now completed the cup. What remains is the handle, and a small correction from the recent peak of $77.73 suggests this formation.

Relative Strength Index (RSI), a momentum indicator that measures the speed of price changes, strengthens the handle argument. Between March 9 and April 7, the price made a lower peak, while RSI rose to a higher peak. This is a hidden bearish divergence and suggests that the current correction from the neckline may continue.

A deeper handle will not invalidate the cup. The handle is expected to fall back before the price rises further. The question is how deep it goes, and whether the broad macro picture provides enough support for silver to keep the handle shallow.

Futures contango shows no delivery rush yet

The difference between the front month and second month silver futures (SIL1! minus SIL2!) is at -0.55, a state known as contango, where silver futures prices are trading higher than the nearest prices. This means buyers are not in a hurry to get silver delivered immediately.

In comparison, this difference was 7.875 early in February and 6.515 early in March, both periods when silver price rose sharply and physical demand was tight. The fall from these peaks to negative levels shows that the urgency has now disappeared.

Contango does not necessarily stop an increase, but suggests that today's movement is driven by macro positioning and not physical supply pressure. For the cup pattern to trigger a lasting breakout, the difference should tighten towards zero or turn positive, which would signal that real demand is catching up with the price.

However, macro positioning is changing rapidly. The reason lies in the dollar and in the options markets.

Weaker dollar and falling put-call ratio strengthen the bullish scenario

The ceasefire led to immediate repricing across commodities. Brent oil fell 15% as the relaxation between the US and Iran removed the war premium on oil prices. When oil prices fall, the petrodollar effect decreases, where oil-importing countries must buy dollars to pay for crude oil. Less dollar demand leads to a weaker dollar in the short term.

DXY has fallen 1.63% from the peak on April 6 and is now at 98.69, right at the technical support level of 0.382. If this level breaks, the next levels are 98.09 and 97.50. Every downward movement in the dollar historically provides tailwinds for silver price, as the metal becomes relatively cheaper for buyers with other currencies.

The options market confirms the change. iShares Silver Trust (SLV) put-call ratio, which compares bearish put options with bullish call options, fell from 0.67 on April 6 to 0.47 on April 7. The open positions ratio also fell from 0.60 to 0.59. Both are well below 1.0, meaning that call buyers dominate over put buyers. The drop between April 6 and 7 suggests that bearish positions are being unwound after the ceasefire changed the macro picture.

With a weaker dollar, falling oil prices, and bullish positioning in the options market, the silver price chart will be crucial for the further development.

Key levels for silver price to reach about $100

Silver is trading at $77.31. The cup's neckline lies between $77.29 and $77.73. A 12-hour close above $77.73 will confirm the cup breakout.

Above the neckline, $79.12 at the 0.618 level is the first real confirmation zone. A close above $79.12 will confirm the breakout and move the target higher. $85.07 becomes the first major target. If momentum continues, the 1.618 extension at $94.69 and the entire estimated target of 32% at $102.29 (the area above $100) is in play.

For the $100 target to become realistic, two conditions must be met simultaneously. The dollar must continue to weaken below 98.69, and the futures contango must tighten as physical demand returns. Without both, the rise risks stopping at the $85 level.

Cup patterns that form during macroeconomic regime shifts have a nuance. If the macroeconomic reason disappears, for example if the ceasefire breaks down or the dollar rises again, the cup may develop into a failed pattern instead of a confirmed breakout. RSI divergence already points to this risk.

On the downside, $75.45 at the 0.382 level is the first support level for the handle. A deeper handle could test $73.18. $69.51 is the critical support level, and a break below this would significantly weaken the pattern. A fall below $60.88 completely invalidates it.

Currently, $77.73 separates a confirmed cup breakout with a path toward $85.07 and eventually $100, from a handle that deepens towards $73.18 and the floor at $69.51.