Silver Price Analysis: XAG/USD seems vulnerable near one-week low, around $25.00 mark
- Silver added to the previous day’s losses and edged lower for the second straight day.
- The overnight break through an ascending channel supports prospects for further losses.
- Sustained strength beyond the $25.70 region is needed to negate the bearish outlook.
Silver witnessed some follow-through selling for the second successive day on Wednesday and retreated further from the six-week high touched on the first day of the current week.
From a technical perspective, the overnight sustained break through the lower end of an upward sloping channel extending from the monthly low was seen as a fresh trigger for bearish traders. A subsequent slide below the 200-period SMA on the 4-hour chart adds credence to the negative outlook.
That said, technical indicators on the daily chart - though have been losing traction - are yet to confirm the bearish bias. Moreover, RSI on hourly charts is hovering near oversold territory. This makes it prudent to wait for some intraday consolidation before positioning for additional losses.
Nevertheless, the XAG/USD seems vulnerable to weaken further below the $24.70 intermediate support and accelerate the slide towards testing the next relevant support near the $24.25 region. The downward trajectory could get extended towards testing sub-$24.00 levels, or the 200-day SMA.
On the flip side, attempted recovery might now confront resistance near the $25.30-$25.35 region. Any further move up is more likely to attract fresh selling and remain capped near the aforementioned ascending channel support breakpoint, now turned resistance, around the $25.70 region.
The latter should act as a key pivotal point for short-term traders, which if cleared decisively will negate prospects for any further losses. The XAG/USD could then aim to surpass the $26.00 round-figure mark and climb back to the overnight swing high, around the $26.20 region.
Silver 4-hour chart
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Key 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.
