Silver Price Analysis: XAG/USD could slide back to retest YTD low, around $20.45 region


  • Silver prolonged this week’s retracement slide and edged lower for the second straight day.
  • The set-up favours bearish traders and supports prospects for a further depreciating move.
  • Sustained move beyond the $22.00 mark is needed to negate the near-term negative bias.

Silver witnessed some selling for the second straight day on Thursday and extended this week's pullback from the 50% Fibonacci retracement level of the $23.24-$20.46 downfall. The white metal remained depressed through the first half of the European session and was last seen trading around the $21.30-$21.35 region, down nearly 0.50% for the day.

Looking at the broader picture, the overnight slide confirmed a breakdown through the lower end of an ascending trend channel, which constituted the formation of a bearish flag pattern. Subsequent weakness below the 50-period SMA on the 4-hour chart adds credence to the negative set-up and supports prospects for further losses.

Moreover, technical indicators on the daily chart are still holding deep in the negative territory and have again started gaining bearish traction on the 4-hour chart. Hence, some follow-through decline towards testing the 23.6% Fibo. level, around the $21.15 region, en-route the $21.00 mark, remains a distinct possibility.

The downward trajectory could further get extended and allow bearish traders to aim back to challenge the YTD low, around the $20.45 region touched last week.

On the flip side, the 38.2% Fibo. level, near the $21.55 area, should now act as immediate resistance. Any subsequent move up is more likely to confront resistance near the overnight swing low, around the $21.75 region. This is followed by the 50% Fibo. barrier, just ahead of the $22.00 mark, which if cleared might trigger a short-covering rally.

Silver 4-hour chart

fxsoriginal

Key levels to watch

XAG/USD

Overview
Today last price 21.59
Today Daily Change -0.04
Today Daily Change % -0.18
Today daily open 21.63
 
Trends
Daily SMA20 22.66
Daily SMA50 24.17
Daily SMA100 23.84
Daily SMA200 23.61
 
Levels
Previous Daily High 21.92
Previous Daily Low 21.51
Previous Weekly High 22.37
Previous Weekly Low 20.46
Previous Monthly High 26.22
Previous Monthly Low 22.68
Daily Fibonacci 38.2% 21.76
Daily Fibonacci 61.8% 21.67
Daily Pivot Point S1 21.46
Daily Pivot Point S2 21.28
Daily Pivot Point S3 21.05
Daily Pivot Point R1 21.86
Daily Pivot Point R2 22.09
Daily Pivot Point R3 22.27

 

 

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