Silver Price Analysis: XAG/USD seems vulnerable near 1-1/2-week low, around $24.75

• Silver witnessed aggressive selling on Thursday and dropped to over a one-week low.
• The technical set-up favours bearish traders and supports prospects for further losses.
• Attempted recovery could now be seen as a selling opportunity near the $25.00 mark.

Silver came under intense selling pressure on Thursday and dropped to a one-and-half-week low, around the $24.70-$24.65 region during the first half of the European session.

From a technical perspective, the overnight bounce struggled to find acceptance above the 200-period SMA on the 4-hour chart and the subsequent sharp fall favours bearish traders. The negative outlook is reinforced by the fact that the XAG/USD earlier this week confirmed a bearish break through the lower end of an upward sloping channel extending from the monthly low.

Moreover, technical indicators on the daily chart have just started drifting into bearish territory and support prospects for further losses. That said, RSI on hourly charts is hovering near the oversold zone and warrants some caution before placing aggressive bearish bets. Nevertheless, the XAG/USD seems vulnerable to prolonging this week's decline from the six-week high.

The ongoing downward trajectory seems strong enough to drag spot prices to the next relevant support near the $24.25 region. This is closely followed by the $24.00 round-figure mark and the very important 200-day SMA, around the $23.85 region, which if broken will be seen as a fresh trigger for bearish traders and pave the way for a further near-term depreciating move.

On the flip side, attempted recovery might now confront stiff resistance near the $25.00 psychological mark ahead of the overnight swing high, around the $25.30 region. Any further move up is more likely to attract fresh selling and remain capped near the aforementioned ascending trend-channel support breakpoint, now turned resistance, around the $25.70 region.

Silver 4-hour chart

Key levels to watch