Silver Price Analysis: XAG/USD plummets to three-week low, bears flirt with $22.00 mark
- Silver witnessed aggressive selling on Thursday and dived to a near three-week low.
- The technical set-up supports prospects for a further near-term depreciating move.
- A sustained strength above the $22.00 mark is needed to negate the negative bias.
Silver dived to a near three-week low heading into the North American session, with bears now awaiting a sustained break below the $22.00 round-figure mark.
From a technical perspective, Thursday's steep decline confirmed a bearish break through the $22.65-60 region, support marked by the lower end of a one-and-half-week-old trading range. This comes on the back of the recent failures near the 100-day SMA and favours bearish traders.
Meanwhile, technical indicators on the daily chart have been gaining negative traction and are still far away from being in the oversold territory. This further adds credence to the near-term bearish outlook and supports prospects for an extension of the downward trajectory.
Some follow-through selling below the $22.00-$21.90 area will reaffirm the negative bias and drag the XAG/USD back to challenge the 2021 low, around the $21.40 region. The bearish trend could further get extended towards the next relevant support near the $21.00 round figure.
On the flip side, any attempted recovery move could now be seen as a selling opportunity around the $21.60-65 support breakpoint. This, in turn, should cap the upside for the XAG/USD near the $22.00 mark, which should act as a pivotal point for short-term traders.
Silver daily chart
Technical levels to watch
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
