Silver Price Analysis: Turns vulnerable below $26.00 mark
|- Silver witnessed some fresh selling on Wednesday and dropped back closer to weekly lows.
- Break below ascending channel/200-hour SMA support has set the stage for further losses.
- Bullish oscillators on the daily chart warrant caution before placing aggressive bearish bets.
Silver extended its steady intraday descent through the early European session and dropped to the lower end of its weekly trading range, around the $25.90 region in the last hour.
The downward momentum dragged the XAG/USD below the lower boundary of a short-term ascending channel extending from YTD lows, around the $23.80-75 region touched on March 31. The mentioned support, around the $26.10-$26.00 area coincided with 200-hour SMA. A sustained breakthrough could be seen as a fresh trigger for bearish traders and might have already set the stage for further weakness.
Meanwhile, RSI (14) on the 1-hour chart drifted into the oversold territory and helped limit any further losses. Moreover, technical indicators on the daily chart are still holding in the bullish zone. This makes it prudent to wait for some strong follow-through selling below the weekly lows support, around the $25.85-80 region before positioning for an extension of the depreciating move.
The XAG/USD might then turn vulnerable to accelerate the fall towards the key $25.00 psychological mark en-route the $24.65-60 horizontal support. Some follow-through selling would allow bearish traders to challenge the $24.00 mark. This is followed by YTD lows, around the $23.80-75 region touched on March 31, below which the commodity could slide further towards the $23.20 support zone.
On the flip side, any meaningful recovery back above the $26.00-$26.10 confluence support breakpoint might now be seen as a selling opportunity and runs the risk of fizzling out rather quickly. This, in turn, should continue to cap the XAG/USD near the $26.50-60 heavy supply zone. Only a sustained move beyond the mentioned barrier will negate the bearish outlook and pave the way for further gains.
XAG/USD 1-hour chart
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.