Silver Price Analysis: Acceptance below $23.00/61.8% Fibo. favours XAG/USD bears

Silver lacked firm directional bias on Tuesday and seesawed between tepid gains/minor losses heading into the North American session. The white metal was last seen trading around the $22.85-80 region, just above the lowest level since October 13 touched in the previous day.

Looking at the technical picture, the XAG/USD now seems to have found acceptance below the $23.00 round-figure and the 61.8% Fibonacci level of the $21.42-$25.41 strong move up. This comes on the back of the recent break through the 100-day SMA and an ascending channel confluence support, which, in turn, favours bearish traders.

The negative outlook is reinforced by the fact that technical indicators on the daily chart are holding deep in the negative territory and are still far from being in the oversold zone. Some follow-through selling below the $22.70-65 region will reaffirm the bearish bias and pave the way for a further near-term depreciating move.

The XAG/USD might then accelerate the slide towards testing the next relevant support near the $22.30-25 region before eventually dropping to the $22.00 round-figure mark. The downward trajectory could further get extended towards the YTD low, around the $21.45-40 region set on September 29.

On the flip side, any attempted recovery now seems to confront stiff resistance near the $23.00-10 region. A further move up would now be seen as a selling opportunity and runs the risk of fizzling out quickly near the $23.40-45 region. The latter coincides with the 50% Fibo. level, which should cap the upside for the XAG/USD, at least for now.

Silver daily chart

Technical levels to watch