Silver Price Analysis: XAG/USD bears retain control, descending channel breakdown in play
|- Silver continued losing ground on Friday and dived to a two-year low, below the $20.00 mark.
- The downward trajectory confirmed a fresh bearish break through an ascending trend channel.
- Oversold oscillators warrant some caution for bearish traders and positioning for further losses.
Silver remained under intense selling pressure on the last day of the week and weakened further below the $20.00 psychological mark during the early part of the European session. The downward trajectory dragged spot prices to the lowest level since July 2020, around the $19.85 region in the last hour.
With the latest leg down, the XAG/USD now seems to have confirmed a fresh breakdown through a one-month-old descending trend channel and seems vulnerable to extending the negative momentum. That said, oscillators on hourly/daily charts are flashing oversold conditions and warrant some caution for bearish traders.
This makes it prudent to wait for some near-term consolidation or a modest bounce before positioning for any further depreciating move. Nevertheless, the technical set-up supports prospects for an extension of the bearish trend and a fall to the next relevant support near the $19.60-$19.55 region.
On the flip side, any attempted recovery back above the $20.00 mark would attract fresh selling and remain capped near the ascending trend-channel support breakpoint, around the $20.25 region. The latter should now act as a pivotal point, which if cleared might trigger a near-term short-covering move.
The XAG/USD might then accelerate the momentum towards an intermediate hurdle near the $20.45-$20.50 area en-route the $21.00 round-figure mark.
Silver 4-hour chart
Key levels to watch
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