Silver Price Analysis: XAG/USD sticks to gains above one-month low, not out of the woods yet

Silver attracts some buying and recovers a part of the overnight slide to a one-month low.
The recent breakdown below important technical support levels favours bearish traders.
Any subsequent recovery might now be seen as a selling opportunity and remain capped.

Haresh Menghani FXStreet

Silver gains some positive traction on Wednesday and for now, seems to have snapped a two-day losing streak to a one-month low, around the $22.65 region touched the previous day. The white metal maintains its bid tone around the $22.80-$22.85 zone through the early part of the European session, though the near-term technical setup suggests that the path of least resistance is to the downside.

Against the backdrop of this week's breakdown below an ascending trend-line extending from the June swing low, a subsequent slide and acceptance below the very important 200-day Simple Moving Average (SMA) was seen as a fresh trigger for bears. Moreover, oscillators on the daily chart are holding in the negative territory and are still far from being in the oversold zone. This, in turn, validates the near-term bearish outlook for the XAG/USD and supports prospects for the emergence of fresh selling at higher levels.

Hence, any further recovery beyond the $23.00 round-figure mark is likely to remain capped near the 200-day SMA breakpoint, currently pegged around the $23.25 region. The latter should act as a pivotal point, which if cleared decisively might trigger a short-covering move and lift the XAG/USD towards the $23.60-$23.65 horizontal barrier. The momentum could get extended further towards reclaiming the $24.00 mark.

On the flip side, the overnight swing low, around the $22.65 region might protect the immediate downside. The XAG/USD, however, still seems vulnerable to slide back towards retesting the multi-month low, around the $22.15-$22.10 area touched in June. Some follow-through selling below the $22.00 mark should pave the way for an extension of the recent downfall witnessed over the past three weeks or so, from the $25.25 area.

Silver daily chart

Technical levels to watch

XAG/USD

Overview
Today last price	22.85
Today Daily Change	0.07
Today Daily Change %	0.31
Today daily open	22.78

Trends
Daily SMA20	24.33
Daily SMA50	23.72
Daily SMA100	24.06
Daily SMA200	23.21

Levels
Previous Daily High	23.19
Previous Daily Low	22.67
Previous Weekly High	24.84
Previous Weekly Low	23.23
Previous Monthly High	25.27
Previous Monthly Low	22.52
Daily Fibonacci 38.2%	22.87
Daily Fibonacci 61.8%	22.99
Daily Pivot Point S1	22.57
Daily Pivot Point S2	22.36
Daily Pivot Point S3	22.04
Daily Pivot Point R1	23.09
Daily Pivot Point R2	23.4
Daily Pivot Point R3	23.61

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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