- Silver witnessed some subsequent sales for the third day in a row.
- The slightly oversold RSI on the 1 hour chart helped limit any further losses.
- The technical setup still remains firmly tilted in favor of bearish traders.
At payment it extended its recent pullback from near the 50% Fibonacci retracement of a sharp decline from the monthly highs and was down for the third day in a row.
The bearish momentum dragged the commodity to week-long lows around the $ 23.15 zone during early trading action on Thursday. However, the oversold RSI (14) on the 1 hour chart helped XAG / USD find some support near the 23.6% Fibonacci level and trim a portion of its intraday losses.
Looking at the broader technical picture, sustained weakness below the $ 23.50-45 confluence region – comprising 38.2% of the Fibonacci level and the 100 hourly SMA – was seen as a key trigger for bearish traders. This could also have set the stage for an extension of the ongoing downward trajectory.
The bearish outlook is reinforced by the fact that the technical indicators on the 4-hour daily charts remain deep in bearish territory and are still shy to be in the oversold zone. Therefore, any significant recovery attempt could be seen as an opportunity for bearish traders.
From current levels, the daily swing lows, around the $ 23.15 region, could protect the immediate downside. Some subsequent selling below $ 23.00 will set the stage for a pullback towards the challenging yearly lows, around the $ 22.20 region touched last Monday.
On the other hand, the break point of the $ 23.45-50 confluence support now appears to act as a strong immediate hurdle. A sustained move further could trigger a short hedging move and push the XAG / USD towards the $ 23.90 – $ 24.00 (38.2% Fibonacci) region, which should now limit the upside.
Silver 1 hour chart
Technical levels
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