Silver Price Analysis: XAG/USD is holding on to a modest recovery around $19

• Silver rose on Thursday and moved away from the two-year low it hit overnight.
• Last week’s break through downtrend channel support continues to favor the bears.
• The oversold of the RSI on the daily chart warrants some caution before positioning for further decline.

the silver It gained some positive traction on Thursday and built on the previous day’s modest bounce from levels below $19.00 or a two-year low. The XAG/USD It maintained its gains throughout the early American session and was last seen near the daily high just below $19.00.

Given last week’s convincing breakout of an almost month old descending channel, the bias remains in favor of the bears. That said, the RSI (14) on the daily chart is still showing oversold conditions and warrants some caution before positioning for further losses.

This makes it prudent to wait for a short-term consolidation or further recovery before XAG/USD resumes its bearish trajectory. Therefore, any further moves to the upside are more likely to be capped near the support breakout point of the descending channel, around the psychological $20.00 mark.

That support is followed by the weekly high, around the $20.20 area, which if breached decisively would suggest that XAG/USD has formed a short-term bottom and trigger some short-covering. Spot prices could then accelerate the recovery towards the horizontal resistance at $20.65.

On the other hand, the $19.25-$19.20 zone seems to protect the immediate low ahead of the year low around the $19.00-$18.90 zone. A little follow-through selling would make XAG/USD vulnerable to testing the $18.00 level before eventually falling to the $17.65 support zone.

Silver 4 hour chart

Technical levels