XAG/USD Price analysis: Silver testing critical support, $61 next?

Market participants maintain a focus on war developments. Continued tensions between the United States (US) and Iran put financial boards in risk-off mode on Tuesday. The US Dollar (USD) is the overall winner, appreciating against all major rivals. Silver extended its fall to a fresh two-week low of $74.09, barely holding above the level in the American afternoon.

War briefing

US President Trump threatened to resume attacks on Iran on Monday, later noting he would pause attacks as a gesture to neighboring Middle East countries that asked for a few more days. Speaking at the White House on Tuesday, President Trump delivered a series of contradictory headlines that only fueled the dismal mood.

Trump noted that Iran is negotiating and “begging” to make a deal, but added the US may have to give Tehran “another hit.” When asked about a timeline, President Trump said two to three days, or maybe until early next week.

Meanwhile, US Treasury Secretary Scott Bessent asked world leaders at a G7 conference to help combat Iranian terrorism by stepping up financial sanctions. Additionally, the North Atlantic Treaty Organization (NATO) warned it may consider a Strait of Hormuz deployment if it’s not open by July.

Finally, Iran’s Mehr news agency reported that explosions were heard on Qeshm Island, a strategic site near the Strait of Hormuz with major port links and close access to vital oil shipping lanes.

Tensions maintain Oil prices near weekly highs, with the barrel of West Texas Intermediate (WTI) hovering around $103.

Market reaction and news

Other than that, the USD firms up on mounting speculation that the Federal Reserve (Fed) will choose the rate hike path to deal with continuous inflationary pressures. Encouraging US employment-related data further backs the case for a rate hike: For the four weeks ending May 2, the private sector added an average of 42,250 jobs per week, with hiring strengthening for the second week in a row, according to the ADP National Employment Report (NER) Pulse.

XAG/USD short-term technical outlook

The XAG/USD pair is pressing the base of an ascendant channel coming from the March monthly low at $61.01. Technical readings in the daily chart hint at a neutral-to-bearish bias, as the pair holds below the 20-day Simple Moving average (SMA) at $77.59 and the 100-day SMA at $81.28. The pair still trades comfortably above the 200-day SMA at $65.41, which underpins the broader uptrend, but the immediate structure points to a downward extension, as the pair struggles around the base of the rising parallel channel at $74.84 and a top boundary near $91.88. The Momentum indicator heads nowhere above its midline, while the Relative Strength Index (RSI) indicator gains bearish strength at around 44, hinting at mounting downside pressure.

On the topside, initial resistance is located at the channel’s lower boundary around $74.84, with a break and daily close above this level needed to re-expose the 20-day SMA at $77.59, followed by the 100-day SMA near $81.28 and then the channel top around $91.88. On the downside, immediate support sits at the current price area near $74.30, ahead of the 200-day SMA at $65.41; a clear drop through these levels would risk a deeper pullback toward the structural base of the advance near $61.

(The technical analysis of this story was written with the help of an AI tool.)