Silver Price Analysis: XAG/USD hit YTD high at $26.08 but retreated on a bearish-engulfing pattern

XAG/USD is poised for five consecutive weeks of gains, up 0.81%.
Silver’s break below $26.00 opened the door for a test of $25.00.

Christian Borjon Valencia FXStreet

Silver price reached a new YTD high at $26.08, but retraces, as traders booking profits, are forming a bearish-engulfing candle pattern, suggesting that further downside is warranted. Among technical indicators, US economic news and Fed speakers underpinned the US Dollar (USD) to the detriment of the white metal. At the time of typing, the XAG/USD is trading at $25.23, down 2.26%.

XAG/USD Price Action

The XAG/USD is still upward biased from a daily chart perspective. The emergence of a bearish candlestick pattern and the Relative Strength Index (RSI) exiting oversold territory triggered profit-taking in the white metal. Additionally, a negative divergence between XAG/USD’s price action and the Rate of Change (RoC) indicates that buying pressure is waning, exacerbating Silver’s drop below $26.00.

If XAG/USD falls below $25.00, that will pave the way toward the February 2 high at $24.63, the previous resistance turned support, followed by the 20-day Exponential Moving Average (EMA) at $24.20. Once cleared, the psychological $24.00 level would be next.

Conversely, for a bullish continuation, the XAG/USD needs to get above the April 13 low of $25.40, which could motivate XAG buyers to re-enter the market at solid price levels. In that case, the XAG/USD first resistance would be the YTD high at $26.08, followed by April 18, 2022, swing high at $26.21, followed by 2022 high at $26.94.

XAG/USD Daily Chart

XAG/USD Technical Levels

Overview
Today last price	25.16
Today Daily Change	-0.66
Today Daily Change %	-2.56
Today daily open	25.82

Trends
Daily SMA20	23.82
Daily SMA50	22.41
Daily SMA100	22.89
Daily SMA200	21.23

Levels
Previous Daily High	25.98
Previous Daily Low	25.39
Previous Weekly High	25.14
Previous Weekly Low	23.57
Previous Monthly High	24.16
Previous Monthly Low	19.9
Daily Fibonacci 38.2%	25.75
Daily Fibonacci 61.8%	25.61
Daily Pivot Point S1	25.49
Daily Pivot Point S2	25.15
Daily Pivot Point S3	24.9
Daily Pivot Point R1	26.07
Daily Pivot Point R2	26.31
Daily Pivot Point R3	26.65

Author

Christian Borjon Valencia

FXStreet

Christian Borjon began his career as a retail trader in 2010, mainly focused on technical analysis and strategies around it. He started as a swing trader, as he used to work in another industry unrelated to the financial markets.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD drops to daily lows near 1.1630

EUR/USD now loses some traction and slips back to the area of daily lows around 1.1630 on the back of a mild bounce in the US Dollar. Fresh US data, including the September PCE inflation numbers and the latest read on December consumer sentiment, didn’t really move the needle, so the pair is still on course to finish the week with a respectable gain.

GBP/USD trims gains, recedes toward 1.3320

GBP/USD is struggling to keep its daily advance, coming under fresh pressure and retreating to the 1.3320 zone following a mild bullish attempt in the Greenback. Even though US consumer sentiment surprised to the upside, the US Dollar isn’t getting much love, as traders are far more interested in what the Fed will say next week.

Gold makes a U-turn, back to $4,200

Gold is now losing the grip and receding to the key $4,200 region per troy ounce following some signs of life in the Greenback and a marked bounce in US Treasury yields across the board. The positive outlook for the precious metal, however, remains underpinned by steady bets for extra easing by the Fed.