Silver Price Analysis: XAG/USD Bears Remain in Control, Descending Channel Breakout in Play

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  • Silver continues to lose ground on Friday and falls to a two-year low below the $20.00 level.
  • The move down confirms a new bearish breakout of an uptrend channel.
  • Oversold technical oscillators warrant some caution for bears before positioning for further losses.

Silver continues to come under intense selling pressure on the last day of the week and weakens further below the psychological $20.00 level during the early part of the European session. The bearish move dragged spot prices to the lowest level since July 2020, around the $19.85 zone in the last hour.

With the latest move lower, XAG/USD appears to have confirmed a fresh breakout of a month-old downtrend channel and looks vulnerable to extending negative momentum. That said, the oscillators on the hourly/daily charts are showing oversold conditions and warrant some caution for bearish traders.

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Therefore, it is prudent to wait for a short-term consolidation or a modest rebound before positioning yourself for another move lower. Nonetheless, the technical setup supports the prospects for an extension of the downtrend and a drop to the next relevant support near the $19.60-$19.55 area.

On the other hand, any recovery attempt above the $20.00 level would attract fresh selling and be capped near the support breakout point of the uptrend channel around the $20.25 region. This last level should act as a key point that, if breached, could trigger a short-term covering move.

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XAG/USD could then accelerate the momentum towards an intermediate hurdle near the $20.45-$20.50 zone heading towards the $21.00 level.

Silver 4 hour chart

fxsoriginal

silver key levels

XAG/USD

Overview
last price today 19.86
daily change today -0.41
daily change today -2.02
Daily opening today 20.27
Trends
daily SMA20 21.46
daily SMA50 21.91
daily SMA100 23.38
daily SMA200 23.29
levels
Previous daily high 20.82
Previous Daily Low 20.22
Previous Weekly High 21.94
Previous Weekly Low 20.62
Previous Monthly High 22.52
Previous Monthly Low 20.22
Daily Fibonacci of 38.2% 20.45
Daily Fibonacci of 61.8% 20.59
Daily Pivot Point S1 20.05
Daily Pivot Point S2 19.83
Daily Pivot Point S3 19.44
Daily Pivot Point R1 20.66
Daily Pivot Point R2 21.04
Daily Pivot Point R3 21.26

Source: Fx Street

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