XAG/USD Price Analysis: Silver bears look to prior support in the $24.70 area

XAG/USD is testing a critical resistance area of the daily M-formation.
Bearish conditions yet to be confirmed on a 4-hour basis.

Silver has moved to test the daily M-formation's neckline which raises prospects of a downside extension.

The following is a top-down analysis that illustrates where the next opportunity to the downside could result from current resistance.

Monthly chart

The monthly chart is testing resistance from where opportunities could arise on the lower time frames, but overall, the outlook is bullish for the long-term.

Meanwhile, the weekly and daily chart are compelling.

Weekly chart

The pair has completed a W formation and has found support.

However, on the daily chart, failures to move higher at this juncture offer a downside opportunity from an M-formation's neckline.

Daily chart

24.70 comes in as the -0.272% Fibonacci of the bullish correction which meets prior support.

This level could be targetted once the 4-hour technical environment turns bearish.

4-hour chart

MACD is still above zero in bullish territory, but with price resistance by the 21=moving average and at structure with a confluence of the 50% mean reversion level, then there is a high probability of bearish conditions developing.

Once conditions have been confirmed as bearish, a trade set up that might include a sell limit from resistance, would offer a high probability opportunity to short the market. A stop-loss above structure and a target of the -0.272% would offer in the region a 1:3 risk to reward ratio.

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