Silver Price Analysis: XAG/USD struggles near weekly low, seems vulnerable below $23.00
- Silver remains under some selling pressure for the third straight day and refreshes weekly low.
- The technical setup seems tilted in favour of bearish and supports prospects for additional losses.
- A sustained strength beyond the $23.55-65 confluence is needed to negate the bearish outlook.
Silver (XAG/USD) drifts lower for the third successive day on Wednesday and drops to a fresh weekly low, around the $22.80 region during the early European session.
From a technical perspective, the recent repeated failures to build on the attempted recovery beyond the 100-day Simple Moving Average (SMA) and rejection near a multi-month-old ascending trend-line support breakpoint favour bearish traders. Moreover, oscillators on the daily chart are holding deep in the negative territory and are far from being in the oversold zone. This suggests that the path of least resistance for the XAG/USD is to the downside.
That said, it will still be prudent to wait for some follow-through selling below the multi-week trough, around the $22.70 region touched last Thursday before positioning for further losses. The XAG/USD might then turn vulnerable to weaken further below the December monthly swing low, around the mid-$22.00s, towards testing the next relevant support near the $22.25 region, and eventually drop further to the $22.00 round-figure mark.
On the flip side, the 100-day SMA, currently around the $23.30 area, might continue to act as an immediate hurdle ahead of the $23.55-$23.65 confluence – comprising the aforementioned trend-line support breakpoint, the 100- and 50-day SMAs. That said, a sustained strength beyond the latter might trigger a short-covering rally and lift the XAG/USD to the $23.80 horizontal barrier en route to the $24.00 round-figure mark.
Some follow-through buying will suggest that the recent corrective downfall since late December has run its course and shift the bias in favour of bullish traders. The XAG/USD might then accelerate the positive momentum towards the $24.60 area, or the December 22 high, before aiming back towards reclaiming the $25.00 psychological mark.
Silver daily chart
Technical levels to watch