Silver Price Analysis: XAG/USD bears await sustained break below 61.8% Fibo. level
- Silver comes under some renewed selling pressure and snaps a two-day winning streak.
- The technical setup favours bearish traders and supports prospects for additional losses.
- Slightly oversold oscillators on the daily chart warrant caution for bears.
Silver struggles to capitalize on this week's modest recovery gains recorded over the past two days and meets with a fresh supply on Thursday. The white metal remains depressed through the mid-European session and is currently placed near the lower end of its daily trading range, around the $20.80 region.
From a technical perspective, the XAG/USD, so far, has managed to hold its neck above the 61.8% Fibonacci retracement level of the recent rally from the October 2022 low. The said support is pegged near the $20.60 area, which is followed by the YTD low, around the $20.40 region touched earlier this week. A convincing break below the latter will be seen as a fresh trigger for bears and set the stage for an extension of the recent slide from the $24.65 zone, or a multi-month top set in February.
Oscillators on the daily chart are hovering near the oversold territory, with the RSI just recovering out of oversold. This makes it prudent to wait for some near-term consolidation or a modest rebound before placing fresh bearish bets. Nevertheless, the lack of any meaningful buying suggests that the path of least resistance for the XAG/USD is to the downside. Hence, some follow-through weakness to the $20.00 psychological mark, en route to the next relevant support near the $19.75-$19.70 region, looks like a distinct possibility.
On the flip side, attempted recovery back above the $21.00 round figure now seems to confront some hurdle near the overnight swing high, around the $21.15-$21.20 area, ahead of the $21.35 region (50% Fibo. level). Any subsequent strength could be seen as a selling opportunity and runs the risk of fizzling out near the $22.00 confluence support breakpoint. The said handle comprises 100-day Simple Moving Average (SMA) and 38.2% Fibo. level, which if cleared could negate the bearish bias.
The XAG/USD could then witness a short-covering rally towards the $22.55-$22.60 supply zone, above which bulls might aim to reclaim the $23.00 round-figure mark, which coincides with the 23.6% Fibo. level.
Silver daily chart
Key levels to watch
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
