Silver Price Analysis: XAG/USD slides towards $23.00 on short-term support break
- Silver price snaps three-day uptrend on breaking a fortnight-old support line.
- Nearly overbought RSI adds strength to the pullback moves targeting 61.8% Fibonacci retracement.
- Convergence of 50-DMA, 50% Fibonacci retracement acts as an important support, XAG/USD bulls need validation from $23.50.
Silver price (XAG/USD) prints the first daily loss in four as the bright metal drops to $23.15 during early Monday in Asia. In doing so, the bright metal remains depressed after two consecutive weekly losses while justifying Friday’s downside break of a short-term key support line.
Not only a downside break of the two-week-old ascending support line, now resistance near $23.50, but the RSI (14) line’s placement near the oversold territory also teases the XAG/USD sellers.
As a result, the bright metal appears well-set to drop towards the 61.8% Fibonacci retracement level of its February-March downside, near $22.85.
However, the 50% Fibonacci retracement and the 50-DMA, around $22.30-20, could together challenge the Silver bears afterward.
It’s worth noting that the XAG/USD weakness past $22.20 makes it vulnerable to drop toward the early-month swing high of around $23.20 while the 200-DMA support of $21.00 could restrict the commodity’s further downside.
On the flip side, recovery moves remain elusive unless the quote stays beyond the previous support line, now resistance around $23.50.
Following that, multiple hurdles around $24.00 and $24.20 can test the Silver buyers before challenging the yearly high of around $24.65.
Overall, the Silver price flags the risk of further downside but the room towards the south appears limited.
Silver price: Daily chart
Trend: Pullback 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.
