Silver Price Analysis: XAG/USD vulnerable below 50 DMA, clings to 38.2% Fibonacci level

• On Wednesday, silver saw some selling for the third day in a row.
• Acceptance below the 50 DMA supports the prospect of further losses.
• Any recovery attempt could now be seen as a selling opportunity.

the silver struggles to take advantage of the late bounce from the previous day and finds fresh offers near the $20.25-$20.30 zone on Wednesday. The white metal remains depressed for the third day in a row and falls back below the key psychological level of $20.00 during the first half of the European session.

XAG/USD is currently hovering around the one-week low hit on Tuesday. He found and was rejected by the 200-week SMA resistance above $20.50 and now also appears to have found acceptance below the 50-week SMA at $20.11, both bearish flagships. The bulls are now looking for the 38.2% Fibonacci level of the $22.52 drop to $18.15 at the $19.80 zone to offer some support. A convincing break below would expose the next relevant support near the $19.55 area (last week’s low).

The latter should now act as a key pivot point, which if broken decisively would be seen as a new trigger for the bears and make XAG/USD vulnerable. Spot prices could then accelerate to the 23.6% Fibonacci level, around the $19.20-$19.15 region, on the way to the $19.00 mark. The bearish trajectory could extend further towards the $18.45-$18.40 zone.

On the other hand, the 50% Fibonacci level around the $20.35 zone now becomes a strong immediate hurdle. Any further move to the upside could be seen as a selling opportunity near the $20.65 horizontal and would still be capped near the 61.8% Fibonacci level around the $20.85 region. That said, some follow-up buying beyond $21.00 could negate the negative outlook for XAG/USD.

XAG daily chart

Technical levels