- Silver witnessed some follow-through selling for the third successive day.
- Slightly oversold RSI on the 1-hour chart helped limit any further losses.
- The technical set-up still remains tilted firmly in favour of bearish traders.
Silver extended its recent pullback from the vicinity of the 50% Fibonacci level of a sharp fall from monthly swing highs and edged lower for the third successive day.
The downward momentum dragged the commodity to one-week lows, around the $23.15 region during the early part of the trading action on Thursday. However, oversold RSI (14) on the 1-hour chart assisted the XAG/USD to find some support near the 23.6% Fibo. level and trim a part of its intraday losses.
Looking at the broader technical picture, sustained weakness below the $23.50-45 confluence region – comprising of 38.2% Fibo. level and 100-hour SMA – was seen as a key trigger for bearish traders. This might have also set the stage for an extension of the ongoing downward trajectory.
The bearish outlook is reinforced by the fact that technical indicators on 4-hour/daily charts are holding deep in the bearish territory and are still shy of being in the oversold zone. Hence, any meaningful recovery attempt might still be seen as an opportunity for bearish traders.
From current levels, the daily swing lows, around the 23.15 region might protect the immediate downside. Some follow-through selling below the $23.00 mark will set the stage for a slide back towards challenging YTD lows, around the $22.20 region touched last Monday.
On the flip side, the $23.45-50 confluence support breakpoint now seems to act as an immediate strong hurdle. A sustained move beyond might trigger a short-covering move and push the XAG/USD back towards the $23.90-$24.00 region (38.2% Fibo.), which should now cap the upside.
Silver 1-hour chart
-637649718762417359.png)
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 1.1100, looks to post weekly losses
EUR/USD continues to trade in a narrow range below 1.1100 and remains on track to end the week in negative territory. Earlier in the day, monthly PCE inflation data from the US came in line with the market expectation, failing to trigger a reaction.
GBP/USD struggles to find a foothold, trades near 1.3150
GBP/USD stays on the back foot and trades in negative territory at around 1.3150 on Friday. The US Dollar holds its ground following the July PCE inflation data and doesn't allow the pair to stage a rebound heading into the weekend.
Gold retreats toward $2,500 ahead of the weekend
Gold stays under modest bearish pressure and declines toward $2,500 in the American session on Friday. The 10-year US Treasury bond yield edges higher toward 3.9% after US PCE inflation data, causing XAU/USD to stretch lower.
Week ahead – Investors brace for NFP amid Fed rate cut speculation
Here comes another NFP week, with investors eagerly awaiting the results as they try to discern the size and pace of the Fed’s forthcoming rate cuts. The weaker than expected July numbers triggered market turbulence, instilling fears about a potential recession in the US.
Easing Eurozone inflation to back an ECB rate cut in September Premium
Eurostat will publish the preliminary estimate of the August Eurozone Harmonized Index of Consumer Prices on Friday, and the anticipated outcome will back up the case for another European Central Bank interest rate cut when policymakers meet in September.
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.