Silver Price Analysis: XAG/USD clings to gains below mid-$23.00s, bearish potential intact
|- Silver edged higher on Monday and recovered a part of the previous session’s heavy losses.
- The bias seems tilted in favour of bearish traders and supports prospects for further losses.
- A sustained move beyond the $24.00 mark is needed to negate the near-term bearish outlook.
Silver regained positive traction on the first day of a new week and recovered a major part of Friday's slide to sub-$23.00 levels, or the lowest level since October 14. The white metal maintained its bid tone through the first half of the European session and was last seen trading just below mid-$23.00s, up nearly 1% for the day.
Looking at the broader picture, the recent sharp retracement slide from the vicinity of mid-$25.00s stalled near support marked by the 61.8% Fibonacci level of the $21.42-$25.41 strong move up. This should now act as a key pivotal point for short-term traders, which if broken decisively should pave the way for further near-term losses.
Given last week's sustained break below the 100-day SMA and an ascending channel confluence support, the bias seems tilted firmly in favour of bearish traders. The negative outlook for the XAG/USD is reinforced by bearish technical indicators on the daily chart, which are still far from being in the oversold territory.
Hence, any subsequent positive move towards the $23.70-75 region might still be seen as a selling opportunity and remain capped near the $24.00 confluence breakpoint. The latter coincides with the 38.2% Fibo. level, which if cleared could shift the bias in favour of bulls and push the XAG/USD to the $24.45-50 region (23.6% Fibo. level).
On the flip side, the $23.10-$23.00 area might now protect the immediate downside. A convincing break below will reaffirm the bearish bias and turn the XAG/USD vulnerable. The next relevant support is pegged near the $22.70-65 region, below which the commodity could eventually drop to test the $22.30-25 support en-route the $22.00 mark.
Silver daily 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.