Silver Price Analysis: XAG/USD tumbles as bearish engulfing pattern looms

Silver prices see a significant drop to $24.75, shedding over 3% in response to a strengthening US Dollar.
Technical analysis reveals a bearish engulfing pattern, despite a recent 'golden cross', signaling mixed signals for traders.
The RSI indicates diminishing buying pressure, hinting at a potential bearish swing.

Christian Borjon Valencia FXStreet

Silver's price plunged on Thursday amidst a risk-off impulse, reinvigorating the US Dollar. Consequently, the grey metal dropped more than $0.70, or 3.15%, as the XAG/USD traded at $24.75 after hitting a daily high of $25.77.

XAG/USD Price Analysis: Technical outlook

Silver is witnessing a downturn, as price action has formed a ‘bearish engulfing’ chart pattern in the last couple of days. Even though the 50-day moving average (DMA) has crossed above the 200-DMA, forming a classic ‘golden cross’ indicating that bulls are gathering steam, momentum suggests the opposite.

The Relative Strength Index (RSI) is hovering just below 60 after peaking around 70, indicating that moderate buying pressure remains. However, the RSI's descent from higher levels suggests that momentum might wane, and bears could gain ground.

The recent pullback has seen the price retreat from resistance near the $26.00 mark. Immediate support is found near December’s 22 high turned support at $24.60, followed by the $24.00 level. A breach of the latter could open a path towards the $23.00 area, marked by the previous cycle lows.

On the other hand, an XAG/USD daily close above $25.00 could pave the way for challenging yearly highs at $25.77, followed by last year’s high at $25.91.

XAG/USD Price Action – Daily Chart

XAG/USD

Overview
Today last price	24.76
Today Daily Change	-0.82
Today Daily Change %	-3.21
Today daily open	25.58

Trends
Daily SMA20	23.93
Daily SMA50	23.22
Daily SMA100	23.44
Daily SMA200	23.33

Levels
Previous Daily High	25.64
Previous Daily Low	24.75
Previous Weekly High	25.45
Previous Weekly Low	24.01
Previous Monthly High	23.5
Previous Monthly Low	21.93
Daily Fibonacci 38.2%	25.3
Daily Fibonacci 61.8%	25.09
Daily Pivot Point S1	25
Daily Pivot Point S2	24.43
Daily Pivot Point S3	24.11
Daily Pivot Point R1	25.9
Daily Pivot Point R2	26.22
Daily Pivot Point R3	26.79

Author

Christian Borjon Valencia

FXStreet

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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