- Silver falls for the second day in a row and hits a new weekly low.
- The break below the 50 DMA and $19.00 favors the prospects for further losses.
- A break through a descending trend line is needed to nullify the negative bias.
the silver remains under selling pressure for the second day in a row on Friday and falls to a new weekly low during the first half of the European session. The white metal is currently trading below $19.00, down more than 1% on the day.
Broadly speaking, the recent recovery from a two-year low, the $17.55 zone, teetered near a falling trendline resistance earlier this week. The subsequent slide below the 50-day SMA and the $19.00 round figure suggests that the corrective bounce may have already run its course. Furthermore, the technical indicators on the daily chart have, thus far, struggled to gain any significant traction and are placed in negative territory. This adds credence to the short-term bearish outlook and supports the prospects for some significant short-term downside move for XAG/USD.
From current levels, the $18.45 to $18.40 zone could act as strong immediate support. A convincing break below will make XAG/USD vulnerable to acceleration of the decline towards $18.00. The bears could try to challenge the low of the year, around the $17.55 zone, which was reached earlier this month.
On the other hand, the push above the $19.00 mark appears to face resistance near the $19.25 (50 DMA) region. Sustained strength beyond that could trigger a short-covering rally and has the potential to lift XAG/USD towards the next relevant hurdle, around the $19.65-$19.75 supply zone. The latter now coincides with a descending trend line barrier extending from the monthly high in May. This is closely followed by the key psychological level of $20.00, which if broken decisively will be seen as a new trigger for bullish traders and pave the way for a significant appreciation move.
Silver Daily Chart
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Technical levels
Source: Fx Street
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