- Silver came under some renewed selling pressure on Friday and stalled this week’s recovery move.
- The set-up remains tilted in favour of bearish traders and supports prospects for additional losses.
- A sustained move back above the $26.00 mark is needed to negate the near-term negative outlook.
Silver witnessed some fresh selling on the last day of the week and for now, seems to have snapped two consecutive days of the winning streak. The white metal was last seen flirting with daily lows, just above the key $25.00 psychological mark.
From a technical perspective, the commodity's inability to capitalize on this week's goodish recovery move from the lowest level since April 13 and the emergence of fresh selling favours bearish traders. This comes on the back of a sustained break below the $25.70-65 confluence support and supports prospects for an extension of the one-week-old downtrend.
The mentioned region comprised the very important 200-day SMA and the 61.8% Fibonacci level of the $23.78-$28.75 move up, which should now act as a pivotal point for short-term traders. Meanwhile, oscillators on the daily chart are holding in the bearish zone and are still far from being in the oversold territory, adding credence to the negative outlook.
Subsequent weakness below weekly swing lows, around the $24.75 region, will reaffirm the bearish bias and pave the way for a slide towards the $24.00 round-figure mark. The XAG/USD could slide further and eventually aim to challenge YTD lows, around the $23.80-75 region.
On the flip side, any meaningful recovery attempt could be seen as a selling opportunity and runs the risk of fizzling out rather quickly near the mentioned $25.70-65 confluence support breakpoint. This is followed by the $26.00 round-figure mark, above which the recovery could get extended towards the next relevant barrier near the $26.40-50 heavy supply zone.
Silver daily chart
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Technical levels to watch
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