- Silver met with some fresh supply near the $26.25-30 region on the first day of the week.
- The set-up supports prospects for an eventual break below the $25.75-70 confluence area.
- A sustained strength beyond the 38.2% Fibo. level is needed to negate the negative outlook.
Silver struggled to capitalize on its early uptick, instead met with some fresh supply near the $26.25-30 static resistance on the first day of a new trading week. The mentioned barrier coincides with the 50% Fibonacci level of the $23.78-$28.75 move up and should act as a pivotal point for intraday traders.
The intraday downfall dragged the XAG/USD below the $26.00 mark, or fresh daily lows during the early European session. The next relevant support is pegged near the $25.75-70 confluence region – comprising the very important 200-day SMA and the 61.8% Fibo. level – ahead of June monthly swing lows, around mid-$25.00s.
Sustained weakness below will be seen as a fresh trigger for bearish traders and set the stage for an extension of last week's rejection slide from the vicinity of the 38.2% Fibo. level. The negative outlook is reinforced by the fact that technical indicators on the daily chart are still holding in the bearish territory.
Hence, a convincing break below the mentioned support levels should pave the way for a further near-term depreciating move. The XAG/USD might then turn vulnerable to extend the downward trajectory further towards challenging the key $25.00 psychological mark.
On the flip side, the $26.25-30 region might continue to keep a lid on any attempted positive move. This is followed by resistance near mid-$26.00s ahead of the $26.80 supply zone, or a strong barrier marked by the 38.2% Fibo. level. A sustained strength beyond will negate any near-term negative bias and prompt some short-covering move.
The XAG/USD might then aim to surpass the $27.00 round-figure mark and accelerate the positive momentum further towards the 23.6% Fibo. level, around mid-$27.00s.
Silver daily chart
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Technical levels to watch
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