FUNDAMENTAL OVERVIEW
- On Wednesday, silver plunges to almost a two-week low and hits the 23.6% Fibonacci level support.
- On the daily charts, weakness below the 200-period SMA will open the door to additional losses.
- Any near-term bearish bias will be offset by a persistent climb back above the $25.20-$5.25 range.
Following a minor recovery, the day before, silver is subject to intense selling, and during the first half of the European session on Wednesday, it falls to a one-and-a-half-week low. The price of the white metal is currently hovering at $24.70 and is edging closer to the 23.6% Fibonacci retracement level of the recent comeback from the YTD low, which is just below the $20.00 psychological threshold reached in March.
While the Relative Strength Index (RSI) on the 4-hour chart is about to drop below the 30 level, it is already displaying oversold conditions on the 1-hour chart. The 100-period Simple Moving Average (SMA) on the 4-hour chart, which if broken strongly will be considered as a new trigger for bearish traders, is therefore more likely to provide some support for any further decline.
This will then provide the conditions for a prolongation of the recent decline from a one-year high, which was reached last week around the $26.10 region. The XAG/USD might then drop to the formerly strong horizontal resistance breakpoint between $24.40 and $24.30, which is now a support, before eventually falling below $24.00 and trying to test the next important support close to the 38.2% Fibonacci level, or around the $23.75 level.
On the other hand, the $25.00 psychological threshold appears to operate as a quick barrier in front of the $25.20–$25.25 supply region. The XAG/USD will rise higher towards the $25.80–$25.85 barrier on the way to $26.00 if there is sustained strength above, indicating that the corrective downturn has ended. A new bullish breakout will be marked by some follow-through purchasing, which will open the door for more gains.
SILVER TECHNICAL ANALYSIS DAILY CHART:
Technical Overview
Silver is currently trading in up channel.
Silver currently trading above 20&50 SMA.
RSI is in buying zone which suggests bullishness and Stochastic is suggesting down trend.
Silver resistance is at 25.097 & its immediate support level is 24.761
HOW TO TRADE SILVER
Silver was trending upward. The price was rising when it formed a bearish engulfing pattern at the top, which caused the trend to change to the negative. It has broken its previous day’s low and is currently trading at a key support level; if this level is broken, an additional downside is possible.
