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.
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
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.