Silver Price Analysis: XAG/USD recovery from 100-DMA needs validation
- Silver consolidates the post-Fed losses, keeps bounce off 100-day SMA.
- Six-week-old horizontal line guards immediate upside, monthly resistance also probe bulls.
- Bears can aim for an ascending support line from November below $26.60.
Silver stays firmer above $27.00, licking the previous day’s wounds around $27.20, amid Thursday’s Asian session. In doing so, the white metal justifies its bounce off 100-day SMA (DMA) to print 0.75% intraday upside but keeps the previous day’s breakdown of the key support from early May, now resistance.
Given the downward sloping RSI line, not oversold, coupled with the metal’s sustained weakness below the previous key support surrounding $27.50, silver prices remain vulnerable to further downside.
In addition to the $27.50 horizontal line, a descending trend line from May 18, near $28.25-30, followed by a bit broader resistance line from August 2020 around $28.65, could challenge the quote’s recovery moves.
Alternatively, a downside break of 100-day SMA level near $26.60 may take a breather around late April levels surrounding $25.75-70 before directing silver bears to the 6.5-month-old support line near $25.00.
It’s worth noting that the yearly low of $23.77 could lure silver bears on the clear break of $25.00.
Overall, silver prices remain on the back foot despite the latest bounce off the key SMA.
Silver daily chart
Trend: Further weakness expected
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
