Silver Price Analysis: XAG/USD bears flirt with confluence support near mid-$27.00s

Silver edged lower through the mid-European session and dropped to the $27.55 area in the last hour, erasing the previous day's positive move.

The downtick marked the second day of a negative move in the previous three and dragged the XAG/USD back closer to an ascending trend-line extending from YTD lows. The mentioned support coincides with 100-period SMA on the 4-hour chart and should now act as a key pivotal point for short-term traders.

Meanwhile, technical indicators on hourly charts have just started drifting into the negative territory and support prospects for additional intraday gains. That said, bullish oscillators on the daily chart warrant some caution before positioning for any meaningful downside amid sustained US dollar selling.

Hence, it will be prudent to wait for sustained weakness below the said confluence support in order to confirm a near-term bearish bias. Some follow-through selling below the overnight swing lows, near the $27.20 area will reaffirm a breakdown and prompt aggressive technical selling around the XAG/USD.

This will further suggest that the XAG/USD has topped out already and pave the way for an extension of the decline towards 200-period SMA support, currently near the $26.25 region. The downward trajectory could further get extended and drag the metal to the $26.00 mark en-route the $25.75-70 support area.

On the flip side, any meaningful move up might continue to confront strong resistance near the $27.90-$28.00 supply zone. This is followed by the $28.25-30 hurdle, which if cleared decisively will negate the negative outlook and set the stage for the resumption of the recent upward trajectory.

The XAG/USD might then aim to surpass an intermediate barrier near the $28.75 area and climb further to reclaim the $29.00 round-figure mark. Some follow-through buying beyond the $29.30-35 should allow bulls to make a fresh attempt towards conquering the key $30.00 psychological mark.

XAG/USD 4-hour chart

Technical levels to watch