- Silver added to the post-FOMC losses and dropped to fresh six-week lows on Thursday.
- The technical set-up favours bearish traders and supports prospects for further losses.
- Any attempted recovery move could now be seen as an opportunity for bearish traders.
Silver failed to capitalize on its intraday positive move, instead came under some renewed selling pressure and extended its recent pullback from the $28.25-30 supply zone.
This marked the fifth consecutive day of a negative move and dragged the XAG/USD to its lowest level since May 6, around the $26.25-20 region during the mid-European session. The mentioned area coincides with the 50% Fibonacci level of the $23.78-$28.75 strong move up and should now act as a key pivotal point for short-term traders.
Meanwhile, the overnight post-FOMC fall confirmed a near-term bearish breakdown through a symmetrical triangle. A subsequent slide below 100-day SMA and bearish technical indicators on the daily chart adds credence to the negative outlook. This, in turn, supports prospects for an extension of the ongoing downward trajectory.
Hence, some follow-through slide below the $26.00 mark, towards testing the $25.70-65 confluence support, remains a distinct possibility. The latter comprises the very important 200-day SMA and the 61.8% Fibo. level. A convincing break below might now turn the XAG/USD vulnerable to challenge the key $25.00 psychological mark.
On the flip side, the $26.65 region (100-DMA), seems to act as immediate resistance. Any subsequent move up could now be seen as a selling opportunity near the $26.85 zone (38.2% Fibo. level). This is followed by the $27.00 mark and the triangle support breakpoint, around the $27.15 region, which should cap gains for the XAG/USD.
XAG/USD daily chart
Technical levels to watch
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