- The price of silver falls near the support of a week-old trading range on Thursday.
- The recent consolidated price action in a range points to a bearish consolidation phase.
- The RSI on the daily chart warrants some caution for aggressive bears.
Silver price (XAG / USD) is moving lower for the second day in a row on Thursday and falls again near the lower end of its weekly trading range, around the $ 22.25-20 region at the start of the session. American Thursday.
From a technical perspective, the recent price action within a range seen in the last week constitutes the formation of a rectangle. Given the recent sharp pullback from three-month highs hit in November, the rectangle could now be classified as a bearish consolidation phase before the next move down.
The negative outlook is reinforced by the fact that the technical indicators on the daily chart remain deep in bearish territory. With that said, the RSI (14) on the aforementioned chart is hovering near the oversold zone. This, in turn, warrants some caution for bears ahead of the release of US consumer CPI inflation figures on Friday.
The technical setup suggests that XAG / USD is more likely to prolong its bound price movement, although the bias remains firmly tiled in favor of the bears. Therefore, any recovery attempt could still be seen as a selling opportunity and risks ending fairly quickly near the $ 22.60 resistance zone.
A sustained strength above this region could trigger some short-term move and push XAG / USD towards the $ 23.00 level. Some continuation purchases beyond the $ 23.15-20 region will negate the negative bias and pave the way for a further move towards the intermediate resistance at $ 23.55-60 on the way to $ 24.00.
On the other hand, a convincing break below the trading range support, around the $ 22.20 region, will be seen as a new trigger for the bears. The XAG / USD could then become vulnerable to break the 22.00 level and accelerate the decline towards challenging the yearly low, around the $ 21.40 region touched in September.
Silver 4 hour chart
Silver technical levels
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