- Silver price gives back its modest intraday recovery gains and approaches the yearly low again.
- The break below the $22.00 level could have already set the stage for further losses.
- The oversold of the RSI (14) on the daily chart warrants some caution before opening new bearish positions.
Silver price (XAG/USD) struggled to capitalize on its modest intraday recovery move and pulled back to the lower end of its daily range during the first half of the European session. The white metal is trading around $21.80, just above the yearly low marked the day before.
As last week’s rebound from the FOMC teetered near an ascending trend line support point, sustained weakness below the $22.00 round level favors the bears. That said, the RSI (14) on the daily chart is already showing oversold conditions and warrants caution.
Therefore, it will be prudent to wait for a short-term consolidation or modest rebound before investors begin to position themselves for an extension of the four-week move down. XAG/USD looks vulnerable to weakening further and retesting the December 2021 low around the $21.40 region.
Some continuation selling will be seen as a new trigger for the bears and will set the stage for further losses. XAG/USD could continue to slide towards the next relevant support near the $21.00 round level, before finally falling to the psychological $20.00 level.
On the other hand, the recovery attempts now appear to be facing stiff resistance near the support break point at $2.00. Any subsequent move to the upside could be seen as a selling opportunity and risks fading quickly near the $22.40-$22.50 horizontal resistance.
That said, sustained strength above that region could trigger a short-covering move and push cash prices towards the $23.00 level on the way to last week’s high around the $23.25 region at $23.30. The latter should act as a pivotal point, which if convincingly surpassed would suggest that XAG/USD has bottomed out.
silver daily chart
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Silver additional levels
Source: Fx Street
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