XAG/USD is hanging near the one-week low, just above the $19.50 support
- Silver is extending its recent retracement slide from a multi-week high hit last Tuesday.
- A convincing break below the $19.50 support should pave the way for more losses.
- Continued strength beyond the $20.40 region is needed to negate any bearish outlook.
Silver remains under selling pressure on Monday, continuing last week’s pullback from the $21.25 area, or the highest since late June. The white metal maintains its offered tone during the early part of the European session, falling to weekly lows around the $19.70-$19.65 region in the last hour.
XAG/USD is currently just below the 38.2% Fibonacci retracement level of the recent recovery from the YTD low, but has managed to hold above the 100-period SMA on the 4-hour chart. The latter, currently hovering around the mid-$19.00 level, should now act as a key pivot. A sustained break to the downside will be seen as a new trigger for bearish traders and pave the way for additional losses.
The subsequent decline has the potential to drag XAG/USD towards the 61.8% Fibo. Levels around the $19.20 region. Closely followed by $19.00 which, if decisively broken, will suggest that the corrective recovery has run out of steam and pave the way for additional losses. Spot prices could then accelerate the decline towards the $18.60 interim support on the way into the $18.35 region and the $18.00 round figure.
On the other hand, the psychological $20.00 mark coincides with the 38.2% Fibo. level, now appears to be holding any intraday advance in check. Any subsequent move higher could attract some sellers and remain capped near the 23.6% Fibo. Levels around the $20.40 region. Continued strength above this will erase any near term negative bias and take the XAG/USD pair into the 20.80 to 20.80 range on its way to $21.00 and the monthly high around the $21.25 region $20.85 lift.