- Silver witnessed fresh selling on Monday and fell to a one-week low.
- The decline found support near the $25.00 level, or the 38.2% Fibonacci level.
- Bullish oscillators require caution before positioning for additional losses.
silver (XAG) came under heavy selling pressure on Monday and extended last week’s retracement decline from near the $27.00 level or the highest level since June 2021. XAG/USD fell to a one-week low, although it managed to find some support before the key psychological level $25.00.
This level represents the 38.2% Fibonacci retracement level of the strong move up $22.00-$26.95 and should act as a pivotal point. A convincing break below will be seen as a new trigger for bearish traders and will set the stage for another short-term depreciation move for XAG/USD.
That said, the technical indicators on the daily chart, although they have been losing some positive traction, still remain in bullish territory. This, in turn, warrants some caution and makes it prudent to wait for sustained weakness below the aforementioned level before placing further bets.
XAG/USD could then accelerate the downward path towards the test of the 50% Fibonacci level near $24.50. This is followed by support near the $24.25 horizontal zone, which if broken would make silver price vulnerable and expose levels below $24.00, or the 61.8% Fibonacci level.
On the other hand, the 23.6% Fibonacci level, around the $25.75-$25.80 region, could now cap the immediate upside ahead of the $26.00 round level. Some follow-up buying would negate the short-term bearish bias and push XAG/USD further towards the intermediate resistance at $26.40.
The bulls could eventually make another attempt to conquer the $27.00 level and push XAG/USD further towards the next relevant hurdle near $27.50. The positive momentum could further extend towards $28.00 en route to the May 2021 daily closing high around the $27.90 area.
silver daily chart
Additional technical levels
Source: Fx Street
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