- Silver is unable to capitalize on the initial rally and is facing rejection near the $ 26.00 level.
- The technical setup still favors the bears and supports the prospects for a further decline.
- A sustained move above the $ 26.25 region is needed to nullify the bearish outlook.
Silver has built on Friday’s good rebound from the five-week lows and gained traction during the early part of Monday’s trading action. The bulls, however, have struggled to capitalize on the move and the XAG / USD encountered further selling near the $ 26.00 level. The mentioned level represents the 50% Fibonacci retracement of the strong upward move from $ 21.90 to $ 30.07 and should now act as a key point for short-term traders.
Given last week’s decisive break below the rising trend line support, the emergence of some new selling suggests that the short-term downtrend could still be far from over. The bearish bias is reinforced by the fact that the oscillators on the daily chart have just started to turn into the negative territory. Therefore, a subsequent fall below the $ 25.00 level, or the 61.8% Fibonacci level is still a clear possibility.
Some subsequent selling below Friday’s lows around the $ 24.85-80 region will be seen as a new trigger for the bears and will pave the way for a further short-term decline. XAG / USD could become vulnerable to further accelerate the decline and challenge the very important support of the 200-day SMA, currently near $ 24.00. The $ 24.50-40 region could provide some intermediate support on the way down.
In the meantime, any recovery attempt could be seen as a selling opportunity and risks disappearing close to 50% Fibonacci. This is closely followed by the breaking point of the mentioned trend line support, around the $ 26.25 region, which should limit the rise of the XAG / USD. That being said, a sustained force above this region will negate the bearish bias and could trigger a short-term hedge around the white metal.
Silver daily chart
Silver technical levels
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
