XAG / USD near weekly lows below $ 28.00 level

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  • Silver sees some new sales on Thursday and erases the modest gains of the previous day.
  • Price action within the range constitutes the formation of a rectangle on the short-term charts.
  • Mixed technical indicators on hourly / daily charts warrant some caution for aggressive investors.

Silver was unable to capitalize on the positive movement of the previous day and came under renewed selling pressure on Thursday. The slide has dragged XAG / USD into the $ 27.75 area during the first half of the European session, again close to weekly lows.

From a technical perspective, the XAG / USD, barring a few point spikes, has been hovering within a familiar trading range for the past three weeks or so. Price action within the range constitutes the formation of a rectangle, pointing to indecision among investors.

Meanwhile, the technical indicators on the 1 hour chart have been gaining negative momentum. That being said, the bullish oscillators on the daily chart support the prospects for some lower buying to emerge and warrant caution among aggressive bears.

Therefore, any subsequent decline could still be seen as a buying opportunity near the $ 27.60-55 region. This region should help limit the decline near the range support, around the $ 27.35-30 region, which if decisively broken could make the XAG / USD vulnerable to extending the decline.

The next relevant support is near the $ 27.00 level, below which the XAG / USD could accelerate the decline to the horizontal level of $ 26.45. The downside move could extend towards the $ 26.00 level on the way to the very important 200-day SMA, around the $ 25.70 zone.

On the other hand, the round level of $ 28.00 now appears to act as an immediate resistance ahead of the strong $ 28.25-30 barrier. This is followed by resistance near the $ 28.55 region, at the weekly highs, and at the May monthly highs around the $ 28.75 region.

The bulls could wait for a sustained move above the aforementioned hurdles before positioning for any further bullish moves. The XAG / USD could then break above the $ 29.00 level and the intermediate resistance of $ 29.40-50 and aim to regain the key psychological level of $ 30.00.

Silver daily chart

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Silver technical levels

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