- Silver fell to a six-week low on Friday, confirming a bearish break below $21.00.
- Any significant rally attempts could be seen as a selling opportunity and remain limited.
- XAG/USD now looks vulnerable to weaken further below the $20.00 psychological level.
the silver reversed a sharp drop to a six-week low and was last seen posting modest intraday losses, around the $20.90-$20.85 region during the early American session. That said, it appears that there is no significant recovery yet and attempts at recovery are in danger of fading fast.
A sustained breakout and acceptance below the $21.00 round level could be considered a new trigger for bearish traders. Furthermore, the technical indicators on the daily and four-hour charts remain in negative territory and are still far from being in the oversold zone. This, in turn, supports the prospect of further losses.
Therefore, a pullback to the low of the last few years, around the $20.45 area set in May, looks like a distinct possibility. A bit of follow-through selling should pave the way for an extension of the downside path and pave the way for a drop to the psychological $20.00 level on the way to $19.35-$19.30 support.
On the other hand, the push beyond $21.00 is likely to face resistance near the daily high around the $21.15 region. Any further recovery could be seen as a selling opportunity near the $21.50 to $21.55 offer. This, in turn, should cap XAG/USD near the $21.70 zone, or the 200-period SMA on the 4-hours chart.
Silver 4 hour chart
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Technical levels
Source: Fx Street
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