Silver Price Analysis: XAG/USD plunges to multi-month low, fast approaching $22.00 mark

Silver is witnessing heavy follow-through selling on Monday and dived to a near three-month low.
Last week’s break below the 200-DMA and ascending trend-line was seen as a key trigger for bears.
Extremely oversold RSI makes it prudent to wait for some consolidation before the next leg down.

Haresh Menghani FXStreet

Silver has extended a three-week-old bearish trend and witnessed some follow-through selling for the eighth successive day on Monday. This also marked the ninth day of a negative move in the previous ten and dragged spot prices to the $22.00 neighbourhood, or a near three-month low during the early North American session.

Looking at the broader picture, last week's sustained breakthrough of the very important 200-day SMA and an ascending trend-line extending from December 2021 was seen as a fresh trigger for bearish traders. A subsequent slide below the $22.65 static support aggravated the bearish pressure and contributed to the downfall.

That said, RSI (14) on the daily chart is already flashing extremely oversold conditions and warrants caution for aggressive traders. This makes it prudent to wait for some near-term consolidation or modest bounce back towards the $22.65 area before positioning for an extension of the ongoing downward trajectory.

Hence, any further decline is more likely to pause near the $22.00 round-figure mark. That said, a convincing break below should pave the way for additional losses and expose the next relevant support near the $21.45-$21.40 region, or the December 2021 swing low.

On the flip side, an attempted recovery back above the $22.65 region could be seen as a fresh selling opportunity near the $23.00 round figure. This, in turn, should cap the upside for the XAG/USD near the aforementioned ascending trend-line support breakpoint, now turned resistance near the $23.20 area.

Silver daily chart

Key levels to watch

XAG/USD

Overview
Today last price	22.21
Today Daily Change	-0.58
Today Daily Change %	-2.54
Today daily open	22.79

Trends
Daily SMA20	24.53
Daily SMA50	24.84
Daily SMA100	23.91
Daily SMA200	23.8

Levels
Previous Daily High	23.56
Previous Daily Low	22.68
Previous Weekly High	24.18
Previous Weekly Low	22.68
Previous Monthly High	26.22
Previous Monthly Low	22.68
Daily Fibonacci 38.2%	23.02
Daily Fibonacci 61.8%	23.23
Daily Pivot Point S1	22.46
Daily Pivot Point S2	22.13
Daily Pivot Point S3	21.58
Daily Pivot Point R1	23.34
Daily Pivot Point R2	23.9
Daily Pivot Point R3	24.23

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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