Silver Price Analysis: XAG/USD hovers above $24.00; bearish head and shoulders in the making

Silver moves away from a multi-week high set on Wednesday, albeit lacks follow-through.
A convincing break below the $23.80 confluence should pave the way for deeper losses.
Bulls might now wait for a move beyond the $24.35 region before placing aggressive bets.

Haresh Menghani FXStreet

Silver remains under some selling pressure for the second successive day on Friday and retreats further from a three-week top, around the $24.35 region touched on Wednesday. The white metal remains depressed through the early part of the European session and currently trades around the $24.00 round-figure mark, down just over 0.10% for the day.

The XAG/USD, however, manages to hold above the $23.85-$23.80 confluence, comprising the 23.6% Fibonacci retracement level of the recent rally from the monthly low and the 200-period Simple Moving Average (SMA) on the 4-hour chart. The said area could act as a pivotal point for intraday traders and help limit any further decline, against the backdrop of positive technical indicators on 4-hour/daily charts.

A sustained break below, however, might prompt some technical selling and drag the XAG/USD towards the 38.2% Fibo. level, around the $23.55 region. This is closely followed by another confluence support near the $23.40 area, comprising the 200-day SMA and the 50% Fibo. level, which if broken decisively might shift the near-term bias in favour of bearish traders and pave the way for some meaningful downside.

Silver 4-hour chart

Zooming out to the daily chart, the recent price action witnessed since early June seems to constitute the formation of a bearish head and shoulders pattern on the daily chart. The pattern, however, will be confirmed on a sustained break below the neckline support, around the $22.20-$22.10 region.

XAG/USD daily chart

In the meantime, bulls need to wait for some follow-through buying beyond the overnight swing high, around the $24.35 area, before placing fresh bets. The XAG/USD might then aim to surpass the $24.55-$24.60 intermediate hurdle and aim to reclaim the $25.00 psychological mark before climbing to the $25.25 zone, or the July monthly swing high. Some follow-through buying should pave the way for a rise to the $26.00 mark.

Technical levels to watch

XAG/USD

Overview
Today last price	24.09
Today Daily Change	-0.03
Today Daily Change %	-0.12
Today daily open	24.12

Trends
Daily SMA20	23.32
Daily SMA50	23.53
Daily SMA100	23.99
Daily SMA200	23.33

Levels
Previous Daily High	24.35
Previous Daily Low	24.06
Previous Weekly High	23.01
Previous Weekly Low	22.23
Previous Monthly High	25.27
Previous Monthly Low	22.52
Daily Fibonacci 38.2%	24.17
Daily Fibonacci 61.8%	24.24
Daily Pivot Point S1	24
Daily Pivot Point S2	23.88
Daily Pivot Point S3	23.7
Daily Pivot Point R1	24.3
Daily Pivot Point R2	24.47
Daily Pivot Point R3	24.59

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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