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.
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
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.
