Silver Price Analysis: XAG/USD starts breaking lower after butting up against age-old resistance

Silver comes under some renewed selling pressure on the last day of the week.
The technical setup supports prospects for a further intraday depreciating move.
A sustained move beyond the $24.50-$24.55 area will negate the negative bias.

Haresh Menghani FXStreet

Silver extends the previous day's retracement slide from the $24.30 area, or over a one-week high, and remains under some selling pressure on Friday. The white metal maintains its offered tone through the mid-European session and is currently placed near the daily low, around the $23.45 region.

From a technical perspective, the XAG/USD has been attempting but failing to break above an important descending trendline drawn from the February 2021 highs for almost the whole of January. Bears appear to be winning the battle at this key level and pushing the exchange rate lower. Given that momentum oscillators on the daily, 4-hour and hourly charts have all been gaining some negative traction, a the bears look to be firmly back in the driving seat.

The base of an ascending channel on the hourly chart shown below has, at the latest update, already been broken suggesting the short-term trend is on the cusp of reversing lower.

Now XAG/USD may accelerate the fall towards intermediate support near the $23.50-$23.45 area before eventually dropping to test the key weekly low at around the $22.75 region touched on Monday. Some follow-through selling has the potential to drag the commodity further toward testing the next relevant support near the $22.00 round figure.

On the flip side, the daily swing high, around the $24.00 mark, might now act as an immediate hurdle. Any further move will confront tough age-old resistance from the multi-year trendline near the $24.50 region which is also a heavy supply zone. A sustained strength beyond and close on a daily basis above the major trendline should open the way higher and allow the XAU/USD to reclaim the $25.00 psychological mark for the first time since April 2022.

Silver 1-hour chart

Key levels to watch

XAG/USD

Overview
Today last price	23.74
Today Daily Change	-0.18
Today Daily Change %	-0.75
Today daily open	23.92

Trends
Daily SMA20	23.79
Daily SMA50	23.16
Daily SMA100	21.45
Daily SMA200	21.01

Levels
Previous Daily High	24.3
Previous Daily Low	23.6
Previous Weekly High	24.51
Previous Weekly Low	23.17
Previous Monthly High	24.3
Previous Monthly Low	22.03
Daily Fibonacci 38.2%	24.03
Daily Fibonacci 61.8%	23.87
Daily Pivot Point S1	23.58
Daily Pivot Point S2	23.24
Daily Pivot Point S3	22.89
Daily Pivot Point R1	24.27
Daily Pivot Point R2	24.63
Daily Pivot Point R3	24.97

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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