XAG/USD seems vulnerable near the one-week low around $25.00
- Silver added to the previous day’s losses, falling for the second straight day.
- Overnight break of an ascending channel supports prospects for more losses.
- Continued strength above the $25.70 region is needed to negate the bearish prospects.
Silver saw some follow-up selling for the second straight day on Wednesday, falling further from the six-week high set on the first day of the current week.
From a technical perspective, the sustained overnight break through the bottom of an upsloping channel extending from the monthly low was seen as a new trigger for bearish traders. A subsequent dip below the 200-period SMA on the 4-hour chart lends credence to the negative outlook.
However, although the technical indicators on the daily chart have lost traction, they have yet to confirm the bearish bias. Furthermore, the hourly chart’s RSI is floating near the oversold territory. Therefore, it is prudent to wait for an intraday consolidation before bracing for additional losses.
Nonetheless, the XAG/USD pair seems vulnerable for further weakness below the $24.70 interim support and accelerating the slide towards testing the next relevant support near the $24.25 region. The downside could be extended towards testing levels below $24.00 or the 200-day SMA.
On the downside, an attempted recovery might now face resistance near the $25.30-$25.35 region. Any further upside will be more likely to attract fresh selling and remain limited near the aforementioned ascending channel support break point which has now turned into resistance around the $25.70 region.
The latter should serve as a key fulcrum for short-term traders which, if decisively cleared, will wipe out the prospects for further losses. XAG/USD could then aim to surpass the round-$26.00 level and scale back to the overnight swing high around the $26.20 region.