Silver Price Analysis: XAG/USD bears flirt with 200-hour SMA, below mid-$23.00s
|- Silver meets with some supply on Wednesday and challenges the 200-hour SMA.
- The technical setup gradually seems to be shifting in favour of bearish traders.
- A sustained strength beyond $24.00 is needed to negate the negative outlook.
Silver comes under some selling pressure on Wednesday and sticks to its modest intraday losses through the early part of the European session. The white metal is currently placed just below the mid-$23.00s, with bears now awaiting a break below the 200-hour Simple Moving Average (SMA) before placing fresh bets and positioning for any further losses.
Against the backdrop of last week's rejection slide from the $24.00 mark, some follow-through selling will suggest that the recent bounce from a two-month low has run its course and turn the XAG/USD vulnerable amid bearish oscillators on the daily chart. The subsequent downfall has the potential to drag the commodity towards the $23.00 round figure en route to the next relevant support near the $22.70-$22.65 region, or over a two-month low touched in May.
The XAG/USD could eventually drop to the $22.00 mark, which represents a technically significant 200-day SMA, which should act as a strong base and help limit any further losses. That said, a sustained break below will be seen as a fresh trigger for bearish traders and set the stage for the resumption of the recent pullback from over a one-year high, around the $26.15 region, touched in May.
On the flip side, the weekly top, around the $23.75 area set on Tuesday, now seems to act as an immediate barrier ahead of the $24.00 mark. This is closely followed by the $24.15-$24.20 horizontal resistance, which if cleared decisively could trigger a near-term short-covering rally. The XAG/USD might then surpass the $24.45-$24.50 intermediate hurdle and climb to the $24.80 zone before aiming toe reclaim the $25.00 psychological mark.
Silver 1-hour chart
Key levels to watch
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