- Silver faced rejection near resistance in a short-term rising channel on Thursday.
- The mentioned channel constitutes the formation of a bearish flag pattern.
- The sustained break below the pattern support is needed to confirm the bearish bias.
The price of silver oscillates between tepid gains and minor losses around the $ 26.00 level, consolidating the previous day’s retracement decline from the $ 26.60-65 resistance zone.
The aforementioned area marks the upper limit of a short-term uptrend channel extending from annual lows, around the $ 23.80-75 region touched in March. Given the recent sharp pullback from the key psychological level of $ 30.00, the channel now appeared to constitute the formation of a bearish flag chart pattern.
Meanwhile, the technical indicators on the daily chart have started to move into the positive territory and have yet to confirm a bearish bias on the 4-hour chart. This, in turn, makes it prudent to wait for a sustained break below the channel support, around the $ 25.70-65 region, before opening new bearish positions.
Such support coincides with the 200-period SMA on the 4-hour chart, which if decisively broken will confirm a breakout and set the stage for a strong short-term bearish move. The XAG / USD could accelerate the decline towards the key psychological level of $ 25.00 before falling to the horizontal support of $ 24.65-60.
Some subsequent selling would make XAG / USD vulnerable to slide and challenge the $ 24.00 level. The downward movement could extend further towards the yearly lows, around the $ 23.80-75 region, on its way to the $ 23.20 support zone.
On the other hand, any significant positive movement could continue to face some resistance near the $ 26.60-65 region. This, in turn, should limit XAG / USD near the trending channel hurdle, currently near the $ 26.85 region. A convincing breakout will nullify the bearish outlook and trigger an aggressive short-covering move.
The XAG / USD could accelerate the move to regain the $ 27.00 level before launching towards the $ 27.65-70 area.
Silver 4 hour chart
Silver technical levels
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