XAG / USD is pulling back towards USD 23.00 but the bulls remain hopeful
- Silver is losing its five week old horizontal resistance that last came under pressure around the intraday low.
- 200-SMA short-term support line represents further bearish move even if RSI pullback favors sellers.
- The break above at $ 23.50 will confirm a bullish cup and grip chart pattern.
Silver begins 2022 with slight losses of around 0.50% intraday as it falls back from the weekly high towards $ 23.00 early Monday.
In doing so, the bright metal is weakening from a five week old horizontal area of resistance that surrounds $ 23.40-45.
With the RSI line retreating from the near-overbought region, recent falls in silver prices are likely to target the 200 SMA level around the $ 23.00 threshold.
Thereafter, focus will be on an upward sloping support line from December 15 at around USD 22.80.
Meanwhile, an upward correction of USD 23.45 needs to be confirmed from several highs marked at USD 23.75 in late November.
After that, confirmation of the bullish cup-and-grip chart pattern will play its part in directing XAG / USD buyers toward the mid-$ 25.00 zone.
In conclusion, silver prices are likely to see further declines, but the bears still have miles to go.
Silver: four-hour chart
Trend: withdrawal expected