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Silver Price Analysis: XAG/USD faces rejection near 50% Fibo./100-day SMA confluence

  • Silver fails to find acceptance above the 100-day SMA and edges lower on Thursday.
  • Break below the 38.2% Fibo. level should pave the way for a further intraday decline.
  • A sustained move beyond the $19.55-60 confluence will be seen as a trigger for bulls.

Silver struggles to capitalize on its one-week-old positive trend beyond the 100-day SMA and meets with a fresh supply on Thursday. The white metal remains on the defensive through the early European session and is currently placed near the daily low, just below the mid-$19.00s.

The said area represents the 38.2% Fibonacci retracement level of the recent sharp downfall from the monthly peak and should act as a pivotal point for intraday traders. Sustained weakness below might prompt some technical selling, making the XAG/USD vulnerable to weaken further below the $19.00 mark and testing the weekly low, around the $18.80 region.

The latter coincides with the 23.6% Fibo. level, which if broken decisively will negate any near-term positive bias and shift the bias in favour of bearish traders. The XAG/USD might then accelerate the descending trend towards the $18.30-$18.25 intermediate support before eventually dropping to the next relevant support near the $18.00 round-figure mark.

On the flip side, the 100-day SMA, currently around the $19.55-$19.60 region, coincides with the 50% Fibo. level. Some follow-through buying beyond the said confluence barrier should allow the XAG/USD to reclaim the $20.00 psychological mark. The upward trajectory could get extended towards an intermediate hurdle near the $20.50 area en route to the $21.00 mark.

A convincing breakout through the aforementioned barriers will be seen as a fresh trigger for bullish traders and also suggest that the XAG/USD has formed a strong base ahead of the $18.00 mark. The subsequent move should lift spot prices beyond the monthly peak, around the $21.25 region, towards the very important 200-day SMA, currently around the $21.60 area.

Silver daily chart

fxsoriginal

Key levels to watch

 

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