- Silver failed to capitalize on the early uptick and faced rejection near the $26.00 mark.
- The set-up still favours bearish traders and supports prospects for additional weakness.
- A sustained move beyond the $26.25 region is needed to negate the bearish outlook.
Silver built on Friday's goodish rebound from five-week lows and gained traction during the early part of the trading action on Monday. Bulls, however, struggled to capitalize on the move and the XAG/USD met with some fresh supply near the $26.00 mark. The mentioned level represents the 50% Fibonacci level of the $21.90-$30.07 strong move up and should now act as a key pivotal point for short-term traders.
Given last week's decisive break below ascending trend-line support, the emergence of some fresh selling suggests that the near-term bearish trend might still be far from being over. The bearish bias is reinforced by the fact that oscillators on the daily chart have just started driving into the negative territory. Hence, a subsequent slide below the $25.00 mark, or the 61.8% Fibo. level remains a distinct possibility.
Some follow-through selling below Friday's swing lows, around the $24.85-80 region, will be seen as a fresh trigger for bearish traders and pave the way for further near-term weakness. The XAG/USD might then turn vulnerable to accelerate the fall further towards challenging the very important 200-day SMA support, currently near the $24.00 mark. The $24.50-40 region might provide some intermediate support on the way down.
Meanwhile, any attempted recovery move might still be seen as a selling opportunity and runs the risk of fizzling out near the 50% Fibo. level. This is closely followed by the mentioned trend-line support breakpoint, around the $26.25 region, which should cap the upside for the XAG/USD. That said, a sustained strength beyond will negate the bearish bias and prompt some near-term short-covering around the white metal.
XAG/USD daily chart
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays below 1.1050 as mood sours
EUR/USD struggles to stage a rebound and trades below 1.1050 on Tuesday. In the absence of high-tier macroeconomic data releases, the negative shift seen in risk mood supports the US Dollar and doesn't allow the pair to gain traction.
GBP/USD extends decline toward 1.3050
GBP/USD stays on the back foot and declines toward 1.3050 in the American session. Following a short lasting recovery attempt on UK employment data earlier in the day, the pair finds it difficult to holds its ground amid cautious market mood.
Gold holds near $2,500 ahead of this week's key events
Gold struggles to build on Monday's gains but manages to hold near $2,500 on Tuesday. Investors refrain from taking large positions ahead of Wednesday's highly-anticipated US inflation data for August, limiting XAU/USD's volatility.
Five Fundamentals for the week: Jittery markets fear the ECB, US inflation and more Premium
Is there still a chance? Investors hope for a 50-bps rate cut from the Fed but also fear a global recession is underway. The world's three largest economies, the US, China, and the eurozone, are set to rock global markets.
Dogecoin leads meme coin recovery following positive investor sentiment
Dogecoin is up more than 8% on Monday, as it's leading the entire meme coin sector on a rebound. The top meme coin could see a massive rally if it completes a key move within a falling wedge.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.