Silver Price Analysis: XAG/USD clings to modest gains near $25.00, not out of the woods yet
|- Silver staged a modest recovery from over three-month lows touched earlier this Wednesday.
- The technical set-up still favours bearish traders and supports prospects for additional losses.
Silver staged a goodish intraday bounce from the $24.75 area, or the lowest level since April 13 touched earlier this Wednesday. The commodity held on to its recovery gains through the mid-European session, albeit retreated a bit from daily tops and was last seen trading just above the key $25.00 psychological mark.
Extremely oversold RSI on hourly charts turned out to be a key factor that prompted some short-covering move and assisted the XAG/USD to snap three consecutive days of the losing streak. That said, the near-term bias remains tilted firmly in favour of bearish traders and supports prospects for a further depreciating move.
The XAG/USD this week confirmed a bearish break through the $25.70-65 confluence support – comprising of the very important 200-day SMA and the 61.8% Fibonacci level of the $23.78-$28.75 move up. Some follow-through weakness below the previous monthly swing lows, around mid-$25.00s, and the $25.00 mark added credence to the negative outlook.
That said, the emergence of some dip-buying just ahead of the $24.70-65 intermediate support warrants some caution for aggressive bearish traders. Nevertheless, the XAG/USD still seems vulnerable to extend the downward trajectory towards the $24.00 round-figure mark before eventually dropping to challenge YTD lows, around the $23.80-75 region.
On the flip side, any meaningful recovery attempt could be seen as a selling opportunity and runs the risk of fizzling out rather quickly near the mentioned $25.70-65 confluence support breakpoint. This is followed by the $26.00 round-figure mark, above which the recovery could get extended towards the next relevant barrier near the $26.40-50 heavy supply zone.
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.