XAG/USD traded lower on Thursday and Friday, breaking below the 22.86 support (now turned into resistance) zone, and thereby, signaling a forthcoming lower low on the daily chart. What’s more, since June 11, the white metal has been trading below a short-term downside resistance line, and thus, we would consider the near-term outlook to be negative.
If the bears are willing to stay in the driver’s seat, we could see them targeting the low of Sept. 24, 2020, soon, at 21.65. A decisive break below that barrier could carry larger bearish implications, perhaps paving the way towards the 19.48 territory, marked by the inside swing high of July 15, 2020. The next area to consider as a resistance may be at 18.42, marked by the low of July 10, 2020, and the inside swing high of June 1, 2020.
Shifting attention to our daily oscillators, we see that the RSI moved lower and is no lying very close to its 30 line, while the MACD runs below both its zero and trigger lines, pointing down as well. Both indicators detect downside speed and support the notion for further declines in this precious metal.
In order to abandon the bullish case, we would like to see a rebound back above the 24.87 barrier, marked by the peak of Sept. 3. This will confirm a forthcoming higher high, while the price will already be above the aforementioned downside line. The bulls may then get encouraged to push the action towards the 25.97 barrier, or the 26.75 hurdle, marked by the highs of Aug. 4 and July 6 respectively, the break of which could allow extensions towards the 28.22 territory. That territory acted as a ceiling for silver between May 17 and June 10.
XAG/USD silver daily chart technical analysis