Silver Price Analysis: XAG/USD continues to face rejection near $26.00; $25.50-40 holds the key

Silver attracts some sellers following an early uptick to the $26.00 neighbourhood and extends its intraday descent through the early European session on Thursday. The white metal drops to a fresh daily low, around the $25.45 region in the last hour and for now, seems to have snapped a two-day winning streak back closer to over a two-week high touched on Monday.

From a technical perspective, the recent repeated failures near the $26.00 round figure could be seen as the first sign of possible bullish exhaustion. The XAG/USD, however, has been showing resilience near the $25.50-$25.40 strong horizontal resistance breakpoint, now turned support. The said area coincides with the  23.6% Fibonacci retracement level of the March-April rally and should act as a key pivotal point.

Meanwhile, oscillators on the daily chart are holding comfortably in the positive territory. This further makes it prudent to wait for strong follow-through selling below the aforementioned support before confirming that the XAG/USD has formed a near-term top and positioning for any meaningful corrective decline. The white metal might then weaken below the $24.00 mark and test 38.2% Fibo. level, around the $23.70 area.

The downward trajectory could get extended further towards the $23.35-$23.30 confluence, comprising the 50-day and the 100-day Simple Moving Averages (SMAs), en route to the $23.00 mark, or the 50% Fibo. level.

On the flip side, bulls might now wait for a move beyond the $26.00 round figure and a one-year high touched in April before placing fresh bets. The subsequent move up has the potential to lift the XAG/USD towards the $26.25-$26.30 region en route to the March 2022 swing high, just ahead of the $27.00 round-figure mark.

Silver daily chart

Key levels to watch