- Silver edged lower on Thursday and erased a major part of the previous day’s gains to weekly tops.
- The formation of a rectangle on short-term charts points to indecision over the near-term direction.
- Mixed technical indicators on hourly/daily charts warrant some caution before placing aggressive bets.
Silver extended the previous day's rejection slide from the $28.00 mark, or weekly tops and witnessed some selling through the first half of the trading action on Thursday. The commodity was last seen trading around the $27.70-65 region, down over 0.30% for the day.
From a technical perspective, the XAG/USD has been oscillating in a narrow band since the beginning of this week. The range-bound price action constitutes the formation of a rectangle, which points to indecision amid traders over the next leg of a directional move.
The top end of the mentioned trading range coincides with an ascending trend-line support breakpoint – extending from YTD lows touched in March. Repeated failures near the mentioned support-turned-resistance support prospects for further near-term downfall.
The negative outlook is reinforced by the fact that technical indicators on hourly charts have again started drifting into bearish territory. That said, oscillators on the daily chart – though have been losing positive momentum – are yet to confirm a bearish bias.
Hence, any subsequent decline might continue to find decent support near the $27.00 mark and remain limited. Bearish traders are more likely to wait for sustained weakness below the said handle before positioning for any meaningful depreciating move.
The next relevant support is pegged near the $26.60 horizontal zone. Some follow-through selling has the potential to drag the XAG/USD further towards the $26.00 mark en-route the very important 200-day SMA support, currently near the $25.75-70 region.
On the flip side, the $27.90-$28.00 region now seems to have emerged as an immediate strong hurdle and is closely followed by the $28.25-30 supply zone. Sustained strength beyond will negate the negative bias and push the XAG/USD towards monthly tops, around the $28.75 region.
XAG/USD daily chart
Technical levels to watch
|Today last price||27.67|
|Today Daily Change||-0.09|
|Today Daily Change %||-0.32|
|Today daily open||27.76|
|Previous Daily High||28|
|Previous Daily Low||27.52|
|Previous Weekly High||28.56|
|Previous Weekly Low||27.01|
|Previous Monthly High||28.75|
|Previous Monthly Low||25.81|
|Daily Fibonacci 38.2%||27.82|
|Daily Fibonacci 61.8%||27.7|
|Daily Pivot Point S1||27.52|
|Daily Pivot Point S2||27.28|
|Daily Pivot Point S3||27.04|
|Daily Pivot Point R1||28.01|
|Daily Pivot Point R2||28.25|
|Daily Pivot Point R3||28.49|
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