Silver Price Analysis: XAG/USD holding near two-year low, looks vulnerable below $19.00

  • Silver fails again near the $19.50 area and moves lower on Thursday.
  • The formation of a rectangle could be classified as a bearish consolidation phase.
  • The oversold of the RSI on the daily chart warrants caution before opening new bearish positions.

Silver has struggled to build on the previous day’s positive move from near a two-year low and attracted fresh selling near the $19.45-$19.50 area. The intraday drop extended throughout the first half of the European session and dragged spot prices below the $19.00 level.

Generally speaking, the recent movement of prices in a range during the last week and a half constitutes the formation of a rectangle. This points to indecision on the next directional move for XAG/USD and warrants caution before opening new directional positions.

Considering the recent decline from $22.50, or the June monthly high, the rectangle could be classified as a bearish consolidation phase and supports the prospects for an extension of the downside move in the near term. That said, the oversold RSI on the daily chart could keep the bears on the sidelines.

However, acceptance below the $19.00 level validates the negative outlook. Follow-up selling below the $18.75 area, or a two-year low, would make XAG/USD vulnerable to accelerate the bearish path towards $18.00 en route to the $17.65 support zone.

On the other hand, the upper limit of the aforementioned range, around the $19.50-$19.55 area, could continue to act as a strong immediate headwind. Any subsequent move higher is more likely to be met with fresh selling and a run down just before the psychological level of $20.00.

That said, a sustained move above this latest level could trigger a short-covering move and allow XAG/USD to break above an intermediate barrier near the $20.60-$20.65 zone, which coincides with the 100-period SMA. on the 4 hour chart. The recovery could extend towards the $21.00 level.

Silver 4 hour chart

fxsoriginal

silver key levels

XAG/USD

Overview
last price today 18.91
daily change today -0.31
Today Daily change % -1.61
Daily opening today 19.22
Trends
daily SMA20 20.37
daily SMA50 21.21
daily SMA100 22.99
SMA200 Journal 23.16
levels
Previous daily high 19.41
Previous Daily Low 18.86
Previous Weekly High 20.2
Previous Weekly Low 18.92
Previous Monthly High 22.52
Previous Monthly Low 20.22
Daily Fibonacci of 38.2% 19.2
Daily Fibonacci of 61.8% 19.07
Daily Pivot Point S1 18.92
Daily Pivot Point S2 18.61
Daily Pivot Point S3 18.37
Daily Pivot Point R1 19.46
Daily Pivot Point R2 19.71
Daily Pivot Point R3 20.01

Source: Fx Street

You may also like