[ad_1]
- Silver price bounces from 200-DMA but 50% Fib level limits uptrend.
- The downtrend remains intact on the bearish RSI.
- 61.8% Fibo support holds the key to silver price.
The price of silver (XAU / USD) saw its sharpest drop in nearly five months on Thursday, extending its bearish momentum for the fifth time in a row. The white metal hit a seven-week low at $ 25.77 after Fed chief Jerome & Co’s restrictive surprise on Wednesday increased the chances of monetary normalization earlier than previously thought. US Treasury bond yields rose on the aggressive stance of the Fed, fueling demand for the US dollar across the board. Higher interest rates dampen the attractiveness of unproductive gold and silver. However, bullish US jobless claims allayed fears about the restrictive move by the world’s most powerful central bank, which helped the price of silver recover some ground, despite the bright metal ending the day below the $ 26 mark.
On the last day of trading of the week, the silver price paused its downtrend and attempted to rebound amid a pullback in the greenback. The bulls remain cautious on a steady recovery in US rates. Should the US dollar’s retreat widen, silver’s recovery momentum could gain momentum. It’s worth noting that higher inflation, along with a possible hike by the Fed, usually indicates a strengthening US economy, which means improved prospects for industrial metals like silver. However, a recovery is likely to be short-term in the short term.
Silver price chart – technical outlook
Silver: daily chart
As seen on Silver’s daily chart, the sell-off stalled just before critical support at $ 25.70, reflecting the confluence of the 200-day moving average (DMA) and the 61.8% Fibonacci The rally retracements from the March low of $ 23.78. is May highs of $ 28.75.
At the time of writing, price is battling resistance at $ 26.25, which is the 50% Fibonacci level of the same rise.
A sustained break above this level is required to extend the corrective upward move above which the horizontal 100 DMA at $ 26.63 could be probed.
The next relevant barrier can be seen at the round number of USD 27.
The Relative Strength Index (RSI) has bounced back from lower levels but remains below 50.00, suggesting that the bearish trend is still intact.
Alternatively, if the aforementioned critical support at $ 25.75 is convincingly removed, a decline towards the horizontal (dashed) trendline support at $ 24.65 is likely.
[ad_2]
