- Silver witnessed fresh selling on Thursday and eroded a part of the overnight recovery gains.
- The set-up remains tilted in favour of bearish traders and supports prospects for further losses.
- A sustained move back above the $26.00 mark is needed to negate the near-term bearish bias.
Silver struggled to capitalize on the previous day’s goodish recovery move from the lowest level since April 13, instead met with some supply on Thursday. The commodity remained depressed through the mid-European session and was last seen hovering near daily lows, around the key $25.00 psychological mark.
Given this week’s sustained break below the $25.70-65 confluence support, the emergence of fresh selling supports prospects for an extension of the one-week-old downtrend. The mentioned region comprised the very important 200-day SMA and the 61.8% Fibonacci level of the $23.78-$28.75 move up, which should now act as a pivotal point for short-term traders.
The negative outlook is reinforced by the fact that technical indicators on the daily chart are holding deep in the bearish zone and are still far from being in the oversold territory. Subsequent weakness below the overnight swing lows, around the $24.75 region, will reaffirm the bearish outlook and pave the way for a slide towards the $24.00 round-figure mark.
On the flip side, the $25.25-30 region now seems to have emerged as an immediate hurdle. Any subsequent positive move might be seen as a selling opportunity near the $25.70-65 confluence support breakpoint. This, in turn, should keep a lid on any further gains for the XAG/USD near the $26.00 round-figure mark, which if cleared might prompt some short-covering move.
Silver daily chart
Technical levels to watch