- Silver saw a modest recovery from the lows of more than three months touched earlier this Wednesday.
- The technical setup still favors bearish traders and supports further loss prospects.
At payment posted a good intraday bounce from the $ 24.75 area, or the lowest level since April 13 touched this Wednesday. The commodity maintained its recovery gains for the middle of the European session, although it declined from daily highs and was last seen trading just above the key psychological $ 25.00 level.
The extremely oversold RSI on the hourly charts turned out to be a key factor that triggered a short hedging move and helped the XAG / USD break three consecutive days of losing streak. That said, the short-term bias remains firmly skewed in favor of bearish traders and supports the prospects for a further depreciation move.
The XAG / USD confirmed a bearish breakout this week through the confluence support at $ 25.70-65, comprising the very important 200-day SMA and the 61.8% Fibonacci level of the $ 23.78-$ 28.75 upward move. Some follow-up weakness below previous monthly lows around $ 25.50, and $ 25.00 added credibility to the negative outlook.
That said, the emergence of some falling buying just before the intermediate support of $ 24.70-65 warrants some caution for aggressive bearish traders. However, the XAG / USD still looks vulnerable to extend the downward trajectory towards $ 24.00 before finally falling to challenge the yearly lows, around $ 23.80-75.
On the other hand, any significant recovery attempt could be seen as a selling opportunity and risks fading quickly near the mentioned $ 25.70-65 confluence support break point. This is followed by the $ 26.00 level, above which the recovery could extend to the next relevant barrier near the $ 26.40-50 high supply zone.
Silver daily chart