Silver Price Analysis: XAG/USD off monthly lows, not out of the woods yet
- Silver bounced off key support on the hourly chart after the slump.
- Hourly RSI rebounds from the oversold region, points north.
- 21-HMA to challenge XAG/USD’s pullback from monthly lows.
Silver (XAG/USD) paused its six-day losing streak, having hit fresh nine-week lows of $21.70 in early trades.
The bears take a breather after the recent slump, mainly driven by the relentless strength in the US dollar across its main competitors. A flight to safety amid growing fears over coronavirus resurgence and its implications on the global economy bolstered the haven demand for the greenback.
From a short-term technical perspective, the white metal is attempting a minor recovery after meeting strong demand at $21.70, the falling trendline support while the spot wavers in a potential falling channel formation.
To the upside, the bulls look to reclaim the critical 21-daily Simple Moving Average (DMA), currently at $23.02, for the recovery to gain momentum.
The hourly Relative Strength Index (RSI) has rebounded from within the oversold territory and points higher at 37.20, adding credence to the pullback.
A firm break above the 21-HMA barrier could open the door towards the falling trendline resistance at $23.60. The next upside target awaits at the downward-sloping 50-HMA of $23.78.
Alternatively, a rejection at the 21-HMA could reinforce the bearish bias, calling for a retest of the falling trendline support. A breach of the last could trigger a fresh sell-off towards the $20 mark.
Note that silver trades below all major moving averages on the hourly sticks, suggesting that the bulls to face an uphill task on the road to recovery.
XAG/USD: Hourly chart
XAG/USD: Additional levels
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
