Silver Price Analysis: XAG/USD bears flirt with 50% Fibo./100-hour SMA confluence support

• Silver attracted fresh selling near the 61.8% Fibo. and retreated from over a two-week high.
• The technical set-up now favours bearish traders and supports prospects for further losses.
• Sustained move beyond the $22.30-$22.35 area is needed to negate the negative outlook.

Silver extended its steady intraday descent through the first half of the European session and dropped to a fresh daily low, around the $21.85 area. The white metal has now eroded a major part of the overnight gains to over a two-week high and was last seen hovering near the 50% Fibonacci retracement level of the $23.24-$20.46 downfall.

Looking at the broader picture, the XAG/USD, for the third straight day, failed near the 61.8% Fibo. level, around the $22.20 region. The said barrier should now act as a pivotal point, which if cleared decisively will be seen as a fresh trigger for bullish traders and set the stage for an extension of the recent recovery move from the YTD low.

Meanwhile, oscillators on the daily chart remained in the bearish territory and have just started gaining negative traction on hourly charts. The technical set-up now seems to favour bearish traders, though it will be prudent to wait for sustained weakness below the 50% Fibo. level before positioning for any further depreciating move.

The aforementioned support now coincides with the 100-hour SMA, below which the XAG/USD could fall to the $21.65 intermediate support before dropping to the 38.2% Fibo. level, around mid-$21.00s. Some follow-through selling below the $21.30-$21.25 region will reaffirm the negative bias and expose the 23.6% Fibo. level, around the $21.15 area.

The next relevant support is pegged near the $21.00 round-figure mark, below which the XAG/USD could slide back to the YTD low, around the $20.45 region touched early. The downward trajectory could further get extended towards challenging the key $20.00 psychological mark.

On the flip side, momentum back above the $22.00 mark might continue to confront stiff resistance near the $22.20 area (61.8% Fibo. level). Any subsequent move up is more likely to remain capped near the $21.35 region. A convincing breakthrough the said hurdle has the potential to lift spot prices towards the next relevant resistance near the $22.65 zone.

Silver 1-hour chart

Key levels to watch