XAG / USD struggles below USD 24.00, downside seems limited

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  • Silver saw some sales on Wednesday for the second straight day.
  • Mixed oscillators on hourly / daily charts require caution for bearish traders.
  • Any subsequent decline is likely to remain capped near the $ 23.20-15 area.

Silver struggled to benefit from the previous day’s late rebound from multi-day lows and encountered fresh supply on Wednesday. The white metal maintained its offered tone during the early part of European trading hours and traded below the $ 24.00 mark, down nearly 1% for the day.

Given that the XAG / USD has repeatedly struggled to find acceptance above the 100-day SMA, the recent downtrend may have shifted the bias in favor of bearish traders. The negative outlook is compounded by the fact that the technical indicators on the hourly charts have drifted into bearish territory.

However, although the oscillators on the daily chart have lost their positive traction, they are still in the bullish territory. Hence, any further decline could still be viewed as a buying opportunity near the $ 23.55 region. This should help contain the downside move near the strong resistance breakpoint of $ 23.20-15.

On the flip side, any significant positive move could continue to meet stiff resistance near the 100-day SMA, which is currently around the middle of $ 24.00. Any sustained move beyond that is seen as a new trigger for bullish traders and sets the stage for the month-old appreciation move to resume.

Momentum could then push XAG / USD back towards monthly swing highs around the $ 24.80-85 region on the way to the key psychological level of $ 25.00. The latter coincides with the 50% Fibonacci level of the $ 28.75 to $ 21.42 decline which, if eliminated, should pave the way for additional gains.

Silver daily chart

Technical levels to watch


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