Silver Price Analysis: Weakness below $25.00 will shift the bias in favour of XAG/USD bears
|- Silver witnessed a turnaround from the $25.60 confluence resistance, or two-week tops.
- A sustained break below an ascending channel should pave the way for a further decline.
- Bulls might now wait for a move beyond the mentioned barrier before placing fresh bets.
Silver witnessed some selling on the last trading day of the week and erased a major part of the previous day's gains to over two-week tops. The XAG/USD was last seen trading around the $25.15-20 region, down 1.05% for the day.
The recent bounce from YTD lows touched on March 31 stalled near the $25.60 confluence region. The mentioned barrier comprised of the 61.8% Fibonacci level of the $26.64-$23.78 decline and the top end of a short-term ascending channel. This should now act as a pivotal point for short-term traders and help determine the next leg of a directional move for the XAG/USD.
The white metal, so far, has shown some resilience below the 50% Fibo. level and managed to hold its neck above the $25.00 psychological mark. The said level coincides with the trend-channel support, which if broken decisively might trigger some technical selling. This, in turn, will set the stage for a slide towards testing 38.2% Fibo. level, around the $24.85 region.
Meanwhile, technical indicators on hourly charts have again started drifting into the negative territory. Moreover, oscillators on the daily chart are yet to recover from the bearish zone. The set-up supports prospects for an eventual break to the downside and resumption of the prior/well-established downward trajectory witnessed over the past two months or so.
The next relevant bearish target is pegged near the $24.45 region, or 23.6% Fibo. level. Some follow-through selling will negate any near-term positive bias and turn the XAG/USD vulnerable to accelerate the fall towards the $24.00 round-figure mark. The momentum could further get extended and drag the commodity back towards YTD lows, around the $23.80-75 region.
On the flip side, the $25.60 region might continue to act as immediate strong resistance and cap the upside for the XAG/USD. That said, a sustained move beyond might prompt a fresh short-covering move and assist the metal to aim back to reclaim the $26.00 mark. Any subsequent move up would allow bulls to challenge the $26.40-50 heavy supply zone.
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.