Silver Price Analysis: XAG/USD seems vulnerable near three-week low, around mid-$22.00s

Silver extended its recent rejection slide from the very important 200-day SMA and continued losing ground for the sixth successive day on Friday. The white metal remained depressed heading into the North American session and was last seen trading around mid-$22.00s or a near three-week low.

The overnight breakthrough the 50% Fibonacci retracement level of the $21.43-$24.70 strong move up and a subsequent slide below last week's swing low, around the $22.80 area, favours bearish traders. The negative outlook is reinforced by the fact that oscillators on the daily chart have been gaining negative traction and are still far from being in the oversold territory.

Hence, some follow-through weakness towards testing the next relevant support, around the $22.20 region, remains a distinct possibility. This is followed by the monthly low, around the $22.00-$21.95 area. Failure to defend the mentioned support levels will be seen as a fresh trigger for bearish traders and set the stage for a further near-term depreciating move for the XAG/USD.

On the flip side, attempted recovery might now confront immediate resistance near the $22.80 region ahead of the $23.00 mark, or the 61.8% Fibo. level. Any further move up might still be seen as a selling opportunity and runs the risk of fizzling out rather quickly. This, in turn, should cap the upside for the XAG/USD near the 50% Fibo. level resistance, around the $23.30 region.

Silver daily chart

Technical levels to watch