Silver Price Analysis: XAG/USD seems vulnerable near 200-DMA/61.8% Fibo. confluence
|- Silver edged lower on Thursday and was last seen hovering near the $28.80-85 confluence zone.
- The technical set-up favours bearish traders and supports prospects for further depreciating move.
Silver struggled to capitalize on the previous day's goodish bounce from over two-month lows and met with some fresh supply on Tuesday. The commodity remained on the defensive through the first half of the European session and was last seen hovering around the $28.80-85 region.
The mentioned area marks confluence support comprising of the very important 200-day SMA and the 61.8% Fibonacci level of the $23.78-$28.75 move up. This should now act as a key pivotal point for short-term traders and help determine the near-term trajectory for the XAG/USD.
Given last week's break below a symmetrical triangle, the near-term bias remains tilted in favour of bearish traders and supports prospects for a further near-term depreciating move. That said, RSI on the daily chart has moved on the verge of breaking into the oversold territory and warrants some caution.
Hence, it will be prudent to wait for some near-term consolidation or a modest rebound before the next leg down. Nevertheless, the XAG/USD remains vulnerable to weaken further below the overnight swing lows, around the $25.55 region and aim to challenge the key $25.00 psychological mark.
The next relevant support is pegged near the $24.80 horizontal level, below which the XAG/USD could slide further towards the $24.00 round-figure mark. The downward trajectory could eventually drag the white metal back towards YTD lows, around the $23.80-75 region touched in March.
On the flip side, a positive move beyond the $26.00 mark is likely to confront stiff resistance near the 50% Fibo. level, around the $26.25-30 region. Any subsequent strength might be seen as a selling opportunity and remain capped near the $26.55-60 supply zone.
This is followed by the 38.2% Fibo. level, around the $26.85 region. A sustained move beyond the latter is needed to negate the near-term negative bias and provide some meaningful impetus for bullish traders.
XAG/USD 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.