Silver Price Analysis: XAG/USD remains vulnerable, break below 50% Fibo. level awaited

Silver regains positive traction on Thursday and reverses a part of the overnight slide.
The formation of a rectangle on the daily chart marks a bearish consolidation phase.
A sustained break below the 50% Fibo. level will set the stage for a further downfall.

Haresh Menghani FXStreet

Silver attracts some buyers on Thursday and reverses a part of the previous day's rejection slide from a technically significant 100-day Simple Moving Average (SMA) around the $22.00 mark. The white metal sticks to its gains through the early European session and currently trades around the $21.65-$21.70 area, up around 0.80% for the day.

Looking at the broader picture, the XAG/USD has been oscillating in a familiar range over the past week or so, forming a rectangle on the daily chart. Against the backdrop of the recent pullback from the $24.65 area, or the highest level since April 2022, the rectangle could now be categorized as a bearish consolidation phase. Moreover, oscillators on the daily chart are holding deep in the negative zone and are still far from being in the oversold territory.

The aforementioned technical setup suggests that the path of least resistance for the XAG/USD is to the downside. That said, bearish traders are more likely to wait for a convincing break below the 50% Fibonacci retracement level of the recent rally from October 2022 before placing aggressive bets. Some follow-through selling below the monthly low, around the $22.20-$22.15 area, will reaffirm the negative bias and pave the way for deeper losses.

The XAG/USD might then accelerate the fall towards testing the next relevant support near the $20.60 zone. The downward trajectory could get extended further towards the $20.00 psychological mark and drag the white metal to the $19.75-$19.70 region.

On the flip side, any further move up might continue to confront stiff resistance near the $22.00 mark, or the 100-day SMA. That said, some follow-through buying beyond the 38.2% Fibo. level of the recent rally from October 2022, around the $22.15 zone, could negate the bearish bias. The subsequent short-covering rally might then lift the XAG/USD towards the $22.55-$22.60 supply zone, en route to the 23.6% Fibo. level, around the $23.00 round figure.

Silver daily chart

Key levels to watch

XAG/USD

Overview
Today last price	21.63
Today Daily Change	0.13
Today Daily Change %	0.60
Today daily open	21.5

Trends
Daily SMA20	22.47
Daily SMA50	23.22
Daily SMA100	22.01
Daily SMA200	21.02

Levels
Previous Daily High	21.98
Previous Daily Low	21.44
Previous Weekly High	22.08
Previous Weekly Low	21.18
Previous Monthly High	24.55
Previous Monthly Low	22.76
Daily Fibonacci 38.2%	21.65
Daily Fibonacci 61.8%	21.78
Daily Pivot Point S1	21.3
Daily Pivot Point S2	21.1
Daily Pivot Point S3	20.76
Daily Pivot Point R1	21.84
Daily Pivot Point R2	22.18
Daily Pivot Point R3	22.38

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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