- Silver breaks through the 100-day SMA support and drops to a nearly two-month low.
- The technical setup favours bearish traders and supports prospects for further losses.
- A sustained strength beyond the $24.00 mark is needed to negate the bearish outlook.
Silver continues losing ground for the second successive day on Tuesday and confirms a fresh bearish breakdown through the 100-day Simple Moving Average (SMA). The white metal maintains its heavily offered tone through the early North American session and currently trades around the $23.25-$23.30 region, just above a nearly two-month low.
The recent repeated failures near the $24.00 round-figure mark and the subsequent slide below a technically significant moving average could be seen as a fresh trigger for bearish traders. Moreover, oscillators on the daily chart are holding deep in the negative territory and are still far from being in the oversold zone. This, in turn, supports prospects for an extension of the recent retracement slide from over a one-year top, around the $26.15 region touched earlier this month.
Some follow-through selling below the $23.00 mark, which coincides with the 50% Fibonacci retracement level of the March-May rally, will reaffirm the negative outlook. The XAG/USD might then accelerate the fall towards intermediate support near the $22.60-$22.55 region before eventually dropping to the 61.8% Fibo. level, around the $22.25-$22.20 region. This is followed by the $22.00 mark, which if broken decisively will set the stage for a further near-term depreciating move.
On the flip side, attempted recovery back above the 100-day SMA, currently around the $23.35 region, is more likely to attract fresh sellers near the 38.2% Fibo. level, around the $23.75 area. This, in turn, should cap the upside for the XAG/USD near the $24.00 round-figure mark. Some follow-through buying beyond the $24.20-$24.25 region, however, might negate the near-term bearish outlook and prompt an aggressive short-covering rally towards the $25.00 psychological mark.
Silver daily chart
Key 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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD grinds above 0.6500 on hawkish RBA’s Lowe ahead of China PMI, Aussie inflation
AUD/USD picks up bids to pare the previous day’s losses around 0.6520, after snapping a two-day uptrend, as Reserve Bank of Australia (RBA) Governor Philip Lowe sounds hawkish on early Wednesday in Asia.
EUR/USD buyers flirt with resistance-turned-support near 1.0730
EUR/USD remains sidelined around 1.0730-35 as bulls seek more clues to extend the previous day’s recovery from a 10-week low amid Wednesday’s sluggish Asian session. The Euro pair portrays the market’s anxiety as the key European/US data and events stand ready to prod the market’s momentum.
Gold juggles around $1,960 after a rally inspired by US Dollar’s correction
Gold price has turned sideways around $1,960.00 after failing to extend a rally above $1,963.70 in the early Asian session. A quick rally in the Gold price came after a vertical sell-off in the US Dollar Index (DXY).
Bitcoin mining emission approaches net carbon negative as Texas cancels mining curbing bill
Bitcoin mining and the narrative around how Proof-of-Work being one of the most energy-consuming processes in the entire world is set to change. With more sustainable mining methods coming to light and awareness spreading, BTC is close to joining the league of blockchains that have achieved carbon neutrality.
US: Confidence shaken amid early tremors in job market
Consumer confidence slipped slightly in May, and while the weakening may reflect short-term worries about the debt ceiling, the more interesting developments reveal how the sand is shifting under consumers' feet.