XAG/USD revisits 3-month low below $23.00, RSI continues to probe lower
- Silver prices remain under pressure for eight consecutive days.
- Weekly support line and 138.2% Fibonacci retracement combine with oversold RSI conditions to test bears.
- Recovery moves remain elusive until the price stays below $24.15.
Silver (XAG/USD) falls to its lowest level since late February as it tracks the eight-day downtrend during Monday’s Asian session. However, the bright metal is posting 0.55% intraday losses as bears challenge the $22.65-$60 support zone at the latest.
A clear downside break of an ascending trendline from February 24th triggered the light metals’ southbound run in late April. The downside momentum also received support from continued trading below the 200-SMA. However, oversold RSI conditions have sparked intermittent rallies in XAG/USD.
The recent weakness in gold bullion is also vulnerable to a corrective pullback as the RSI (14) drops to 30.00. Another challenge for the bears is the upward convergence of the 138.2% Fibonacci retracement from 24 Feb – Mar 08 and a week old descending trendline near $22.65-60.
Despite this, recovery moves remain elusive until it breaks the previous support line from late February, which was around $24.15 at press time.
On an immediate basis, a downward sloping resistance line from April 18th no later than $23.40 can test the short-term recovery.
Alternatively, a downside break of $22.60 will leave silver prices vulnerable to testing the 161.8% Fibonacci retracement level around $21.95.
Silver: four hour chart
Trend: corrective pullback expected