SILVER PRICE ANALYSIS: XAG/USD BEARS HAVE THE UPPER HAND, BREAK BELOW MID-$26.00 AWAITED

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  • Silver turns lower for the third straight day, albeit holds above a multi-month trough.
  • The technical setup favors bearish traders and supports prospects for deeper losses.
  • A sustained strength beyond the $ 27.55-$27.60 might trigger a short-covering rally.

Silver (XAG/USD) meets with some supply following an intraday uptick to the $27.25-$27.30 region and turns lower for the third successive day during the first half of the European session on Wednesday. The white metal, however, manages to hold its neck above a three-month low touched on Monday and currently trades around the $27.00 round-figure mark. 

Against the backdrop of the recent beak down through the very important 200-day Simple Moving Average (SMA) and failures near the $29.00 mark, the emergence of fresh selling favors bearish traders. Moreover, technical indicators on the daily chart are holding deep in negative territory and are still far from being in the oversold zone. This, in turn, validates the negative outlook and suggests that the path of least resistance for the XAG/USD is to the downside. 

Traders, however, might wait for some follow-through selling below the weekly low, around mid-$26.00s, before positioning for the next leg of a downfall. The XAG/USD might then accelerate the slide towards the $26.00 round figure before dropping to the next relevant support to the $25.65-$25.60 region. The downward trajectory could extend further towards challenging the $25.00 psychological mark en route to the $24.45-$24.40 horizontal support.


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