• Silver witnessed some fresh selling on Wednesday and dropped back closer to weekly lows.
  • Break below ascending channel/200-hour SMA support has set the stage for further losses.
  • Bullish oscillators on the daily chart warrant caution before placing aggressive bearish bets.

Silver extended its steady intraday descent through the early European session and dropped to the lower end of its weekly trading range, around the $25.90 region in the last hour.

The downward momentum dragged the XAG/USD below the lower boundary of a short-term ascending channel extending from YTD lows, around the $23.80-75 region touched on March 31. The mentioned support, around the $26.10-$26.00 area coincided with 200-hour SMA. A sustained breakthrough could be seen as a fresh trigger for bearish traders and might have already set the stage for further weakness.

Meanwhile, RSI (14) on the 1-hour chart drifted into the oversold territory and helped limit any further losses. Moreover, technical indicators on the daily chart are still holding in the bullish zone. This makes it prudent to wait for some strong follow-through selling below the weekly lows support, around the $25.85-80 region before positioning for an extension of the depreciating move.

The XAG/USD might then turn vulnerable to accelerate the fall towards the key $25.00 psychological mark en-route the $24.65-60 horizontal support. Some follow-through selling would allow bearish traders to challenge the $24.00 mark. This is followed by YTD lows, around the $23.80-75 region touched on March 31, below which the commodity could slide further towards the $23.20 support zone.

On the flip side, any meaningful recovery back above the $26.00-$26.10 confluence support breakpoint might now be seen as a selling opportunity and runs the risk of fizzling out rather quickly. This, in turn, should continue to cap the XAG/USD near the $26.50-60 heavy supply zone. Only a sustained move beyond the mentioned barrier will negate the bearish outlook and pave the way for further gains.

XAG/USD 1-hour chart

fxsoriginal

Technical levels to watch

XAG/USD

Overview
Today last price 26.04
Today Daily Change -0.22
Today Daily Change % -0.84
Today daily open 26.26
 
Trends
Daily SMA20 25.48
Daily SMA50 25.93
Daily SMA100 25.95
Daily SMA200 25.49
 
Levels
Previous Daily High 26.46
Previous Daily Low 26.05
Previous Weekly High 26.64
Previous Weekly Low 25.64
Previous Monthly High 27.08
Previous Monthly Low 23.78
Daily Fibonacci 38.2% 26.3
Daily Fibonacci 61.8% 26.21
Daily Pivot Point S1 26.06
Daily Pivot Point S2 25.85
Daily Pivot Point S3 25.65
Daily Pivot Point R1 26.46
Daily Pivot Point R2 26.67
Daily Pivot Point R3 26.87

 

 

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