Silver Price Analysis: XAG/USD near 1-week lows, looks vulnerable to further decline

• The price of silver falls for the second day in a row and again approaches the low of a week.
• The situation remains favorable to the bears and supports the prospects for further losses.
• Sustained strength above $22.00 is needed to negate short-term negative outlooks.

Silver price is unable to take advantage of the previous day’s late bounce from a one-week low and is down for the second day in a row on Thursday. The white metal remains on the defensive during the early European session and is now trading around $21.40.

Considering that XAG/USD has repeatedly failed to find acceptance above the 200-period SMA on the 4hrs chart and faced rejection near the $22.00 level, the bias appears to be in favor of the bears. The negative outlook is reinforced by the fact that the oscillators on the 4hr/daily chart have once again started drifting into bearish territory.

Therefore, a further drop below $21.00, on the way to lows around the $20.90 area, now looks like a distinct possibility. The bearish trajectory could extend further and drag XAG/USD back towards the yearly low around the $20.45 zone set in May. The bears could then try to challenge the psychological $20.00 level.

On the other hand, the $21.50 to $21.55 zone seems to have become a strong immediate resistance. Any significant recovery attempt beyond that barrier could be seen as a selling opportunity near the $21.75 region (200-period SMA). This, in turn, should limit XAG/USD’s rally near the $21.90-$22.00 supply zone, at least for now.

This last level should act as a pivot point, which if broken decisively would nullify the negative outlook and shift the bias in favor of the bulls. XAG/USD could then accelerate the positive momentum towards intermediate resistance near the $22.30 zone on the way to the $22.50 and $23.00 hurdle.

Silver 4 hour chart

Silver technical levels