Silver Price Analysis: XAG/USD finds buyers again near $22.40, rebound appears capped
|- Silver price rebounds as DXY eases but not out of the woods yet.
- XAG/USD faces stiff resistance at the bearish 50-DMA barrier.
- Bears eye a firm break below rising trendline support at $22.43.
Silver price (XAG/USD) is catching a breather above $22.50 after a five-day non-stop downward spiral.
A minor pullback in the US dollar across the board, as the Asian stocks and US equity futures regain footing ahead of PCE inflation data this Friday. The US dollar index eases from 18-month highs of 97.29 to now trade at 97.19, down 0.07% on the day.
The greenback garnered strength this week, mainly in response to the hawkish Fed outlook, stronger US Q4 advance GDP and the Russia-Ukraine geopolitical risks.
Markets are taking profits off the table on their dollar longs ahead of the critical US PCE inflation release, helping silver price find a floor.
However, a bottom in silver price appears distant, as bears are likely to remain in the game amid a bearish technical setup on the daily chart.
After the downside break from three-week-old ascending trendline support at $23.66 on Wednesday, selling pressure intensified and knocked down silver price sharply through all the major Daily Moving Averages (DMA).
XAG bulls, however, managed to find support just ahead of the six-week-long rising trendline support, now aligned at $22.43.
Silver Price Chart: Daily chart
If buyers fail to find a strong foothold above the bearish 50-DMA at $22.91, then sellers are likely to return, putting the daily trendline support at risk once again.
Daily closing below the latter will trigger a sharp sell-off towards the January 7 lows of $21.95, below which the $21.50 psychological level will be on the sellers’ radars.
The 14-day Relative Strength Index (RSI) is attempting a bounce but remains well below the midline, suggesting that the downside risks remain intact.
Silver Additional levels
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