- Silver sees some new selling on Wednesday and falls back near weekly lows.
- The break below the bullish channel and the support of the 200 hourly SMA has set the stage for further losses.
- The bullish oscillators on the daily chart warrant caution before opening aggressive bearish positions.
The price of silver extends its steady intraday decline during the European session on Wednesday and has fallen to the lower end of its weekly trading range, around the $ 25.90 region.
The downside momentum has dragged XAG / USD below the lower bound of a short-term bullish channel extending from yearly lows, around the $ 23.80-75 region touched on March 31. The mentioned support around the $ 26.10-26.00 area coincides with the 200 hourly SMA. A sustained breakout could be seen as a new trigger for the bears and could have set the stage for additional weakness.
Meanwhile, the RSI on the 1 hour chart has moved into oversold territory and has helped limit any further losses. Also, the technical indicators on the daily chart are still in the bullish zone. This makes it prudent to wait for a strong continuation sell below weekly low support, around the $ 25.85-80 region, before positioning for an extension of the move to the downside.
The XAG / USD could become vulnerable to accelerate the slide towards the key psychological level of $ 25.00 on the way to the horizontal support of $ 24.65-60. Some subsequent selling would allow the bears to challenge the $ 24.00 level. This is followed by yearly lows, around the $ 23.80- $ 75 region touched on March 31, below which the price of silver could slide towards the $ 23.20 support zone.
On the other hand, any significant rally above the $ 26.00-26.10 confluence support break point could now be seen as a selling opportunity and risks fading away rather quickly. This, in turn, should continue to limit the XAG / USD near the $ 26.50-60 resistance zone. Only a sustained move above this barrier would negate the bearish outlook and pave the way for additional gains.
Silver 1 hour chart
Silver technical levels
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