• Silver witnesses heavy selling on Thursday and drops back closer to the YTD low.
  • The technical set-up supports prospects for a further near-term depreciating move.
  • Oversold oscillators suggest that bears could take a brief pause near the $18.15 area.

Silver extends the previous day's retracement slide from the $19.10 region with some follow-through selling on Thursday. The downward trajectory dragged the white metal to the $18.30 area, well within the striking distance of a two-year low during the first half of the European session.

From a technical perspective, the XAG/USD on Wednesday struggled to find acceptance above the 50-period SMA on the 4-hour chart. The subsequent slide below the $18.55 intermediate support could be seen as a fresh trigger for bearish traders and supports prospects for an extension of over a one-month-old downward trajectory.

That said, technical indicators on the daily chart are flashing oversold conditions. This, in turn, suggests that any downfall is more likely to find some support and stall near the YTD low, around the $18.15 zone touched last week. This is closely followed by the $18.00 mark, which if broken would reaffirm the negative bias.

The XAG/USD might then accelerate the slide towards the $17.45-$17.40 intermediate support en-route to the $17.00 round-figure mark. The bearish trend could further get extended and drag spot prices to the next relevant support near the $16.70-$16.60 region.

On the flip side, the $18.55-$18.60 support breakpoint now becomes an immediate strong hurdle. Any further recovery might still be seen as a selling opportunity near the 50-period SMA on the 4-hour chart, currently around the $18.80 region. This, in turn, should cap the XAG/USD near the $19.00 mark, which should now act as a pivotal point.

Silver 4-hour chart

fxsoriginal

Key levels to watch

XAG/USD

Overview
Today last price 18.32
Today Daily Change -0.36
Today Daily Change % -1.93
Today daily open 18.68
 
Trends
Daily SMA20 19.62
Daily SMA50 20.89
Daily SMA100 22.69
Daily SMA200 23.06
 
Levels
Previous Daily High 19.1
Previous Daily Low 18.65
Previous Weekly High 19.41
Previous Weekly Low 18.15
Previous Monthly High 22.52
Previous Monthly Low 20.22
Daily Fibonacci 38.2% 18.82
Daily Fibonacci 61.8% 18.93
Daily Pivot Point S1 18.52
Daily Pivot Point S2 18.36
Daily Pivot Point S3 18.07
Daily Pivot Point R1 18.97
Daily Pivot Point R2 19.26
Daily Pivot Point R3 19.42

 

 

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