August 3, 2022
  • August 3, 2022

Silver Price Analysis: XAG / USD Remains Defensive Near $ 26.00

By on April 23, 2021 0
  • Silver faced rejection near short-term ascending channel resistance on Thursday.
  • The mentioned channel constitutes the formation of a bearish flag graphic pattern.
  • Sustained breakout support is needed to confirm the bearish bias.

Silver swung between lukewarm gains / minor losses around the $ 26.00 mark and consolidated the overnight retracement slide from the resistance zone from $ 26.60 to $ 65.

The mentioned area marks the upper bound of a short-term ascending trend channel extending from year-round lows around the $ 23.80- $ 75 region hit in March. Considering the recent sharp pullback from the key psychological mark of $ 30.00, the channel now appears to be forming a bearish flag chart pattern.

Meanwhile, the technical indicators on the daily chart have just started moving towards positive territory and have yet to confirm a bearish bias on the 4 hour chart. This, in turn, makes it prudent to wait for a sustained breakout through channel support, around the $ 25.70-65 region before placing further bearish bets.

This support coincides with the 200 period SMA on the 4 hour chart, which, if broken decisively, will confirm a breakdown and set the stage for a sharp depreciation move in the near term. XAG / USD could then accelerate the fall towards the key psychological mark of $ 25.00 before falling to the horizontal support of $ 24.65-60.

Some follow-up selling would make XAG / USD vulnerable to a slide towards the challenge of the $ 24.00 mark. The downtrend could extend further to yearlows around the $ 23.80-75 region en route to the $ 23.20 support zone.

On the flip side, any significant positive movement could continue to face some resistance near the $ 26.60-65 region. This, in turn, should cap XAG / USD near the trend channel hurdle, currently near the $ 26.85 region. A convincing breakout will negate the bearish outlook and cause an aggressive short cover move.

XAG / USD could then accelerate the movement to recover the $ 27.00 mark before heading towards the $ 27.65-70 area.

XAG / USD 4 hour chart

Technical levels to watch

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