Silver Price Analysis: XAG/USD bounces off over one-week low, bearish potential seems intact
- Silver slides to over a one-week low on Wednesday, albeit finds some support at lower levels.
- The technical setup still favours bearish traders and supports prospects for a further downfall.
- The stage seems all set for a retest of an ascending trend-line support, near the $22.35 region.
Silver drifts lower for the third successive day on Wednesday and drops to a one-and-half-week low, around the $22.65 region during the early European session. The white metal, however, manages to recover a bit in the last hour and is currently trading around the $22.80-$22.75 area, still down around 0.30% for the day.
From a technical perspective, the overnight sustained break and close below the $23.00 round figure was seen as a fresh trigger for bearish traders. Furthermore, oscillators on the daily chart have again started gaining negative traction and support prospects for a further depreciating move for the XAG/USD. Hence, a subsequent slide back towards challenging an ascending trend line extending from the June monthly low, currently pegged around the $22.35 zone, looks like a distinct possibility.
A convincing break though the latter will confirm a fresh breakdown and expose the next relevant support is pegged near the $22.00 mark. Some follow-through selling will set the stage for additional losses. The XAG/USD might then accelerate the downward trajectory towards the $21.25 intermediate support before eventually dropping to the $21.00 round figure.
On the flip side, the $23.00 mark might now act as an immediate hurdle ahead of the $23.20-$23.25 zone and the very important 200-day Simple Moving Average (SMA), currently around the $23.45 region. This is followed by last week's swing high, around the $23.75 area. A sustained strength beyond the latter has the potential to lift the XAG/USD towards the $24.00 round figure en route to the $24.30-$24.35 resistance, above which bulls could aim to reclaim the $25.00 psychological mark.
Silver daily chart
Technical levels to watch