- Silver price is down on Thursday, but remains above the confluence breakout point of $29.20.
- The technical situation favours the bulls and supports the possibility of further buying at lower levels.
- A sustained move beyond the $30.00 level will set the stage for a further appreciating move.
Silver (XAG/USD) price is attracting some sellers during the Asian session on Thursday and reversing much of the previous day’s positive move. However, the white metal manages to hold above the 50-day simple moving average (SMA) and is currently trading around the mid-$29.00 area, down 0.40% on the day.
The 50-day SMA, currently situated near the $29.20 region, coincides with the 50% Fibonacci retracement level of the July-August decline and should act as a pivotal turning point for XAG/USD. Against the backdrop of Tuesday’s failure near the $30.00 psychological level, a convincing break below the said confluence could trigger some technical selling and pave the way for deeper losses.
The XAG/USD pair could then weaken further below the $29.00 round figure, towards testing the 38.2% Fibonacci level support near the $28.55 region. Some follow-through selling has the potential to drag the white metal towards the $28.00 level, below which the downward trajectory could extend further towards the $27.25 region en route to the next relevant support near the $27.00 round figure.
That said, oscillators on the daily chart have been gaining positive traction and are far from being in the overbought zone. This supports the possibility of buying at lower levels and warrants some caution for the bears. That said, it will still be prudent to wait for sustained strength beyond the $30.00 level before positioning for any significant upside move.
The ensuing upside move will set the stage for a move towards the $30.55-$30.60 zone, or the 78.6% Fibonacci level, above which the XAG/USD pair could aim to reclaim the $31.00 level. The XAG/USD pair could then accelerate the momentum further towards the $31.30-$31.40 supply zone en route towards the July high, around the $31.75 region, the $32.00 level, and the $32.50 zone, or the yearly high touched in May.
Silver daily chart
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
