XAG/USD defends 38.2% Fibo. support, around $25.00 mark
- Silver saw fresh selling on Monday, falling to a weekly low.
- The tick down found support near the $25.00 level or the 38.2% Fibo. Step.
- Bullish oscillators require caution before positioning for further losses.
Silver came under heavy selling pressure on Monday, extending last week’s retracement slide from near $27.00 or the highest since June 2021. XAU/USD fell to above a weekly low but found some support before that the psychological key mark of $25.00.
Said handle represents the 38.2% Fibonacci retracement level of the strong bullish move from $22.00 to $26.95 and should act as a pivot. A convincing break to the downside will be seen as a new trigger for bearish traders and sets the stage for further near-term depreciation in XAG/USD.
However, although the technical indicators on the daily chart have lost some of their positive traction, they are still holding themselves in bullish territory. This in turn warrants some caution and makes it prudent to wait for sustained weakness below the above level before placing new bets.
XAG/USD could then accelerate the downtrend to test the 50% Fibo. level, near the mid-$24.00. This is followed by support near the $24.25 horizontal zone which if broken would make spot prices vulnerable and reveal a level below $24.00 or the 61.8% Fibo. Step.
On the other hand the 23.6% Fibo. The level around $25.75-$25.80 could now limit the immediate upside ahead of the $26.00 round number. Some follow-up buying would nullify the near-term bearish bias and further lift XAG/USD towards the intermediate resistance at $26.40.
The bulls might finally make a fresh attempt to scale the $27.00 level and further push the XAG/USD pair towards the next relevant hurdle near the mid-$27.00 area. The positive momentum could extend further towards the $28.00 level on the way to the May 2021 daily close high around the $27.90 area.