Silver Price Analysis: XAG/USD seems poised to challenge YTD low, around $18.15 region

• Silver witnessed heavy selling on Thursday and dropped back closer to the YTD low.
• The technical set-up supports prospects for a further near-term depreciating move.
• Oversold oscillators suggest that bears could take a brief pause near the $18.15 area.

Silver extended the previous day's retracement slide from the $19.10 region, or a multi-day high and witnessed some follow-through selling on Thursday. The downward trajectory dragged the white metal to the $18.30 area, well within the striking distance of a two-year low during the first half of the European session.

From a technical perspective, the XAG/USD on Wednesday struggled to find acceptance above the 50-period SMA on the 4-hour chart. The subsequent slide below the $18.55 intermediate support could be seen as a fresh trigger for bearish traders and supports prospects for an extension of over a one-month-old downward trajectory.

That said, technical indicators on the daily chart are flashing oversold conditions. This, in turn, suggests that any downfall is more likely to find some support and stall near the YTD low, around the $18.15 zone touched last week. This is closely followed by the $18.00 mark, which if broken would reaffirm the negative bias.

The XAG/USD might then accelerate the slide towards the $17.45-$17.40 intermediate support en-route to the $17.00 round-figure mark. The bearish trend could further get extended and drag spot prices to the next relevant support near the $16.70-$16.60 region.

On the flip side, the $18.55-$18.60 support breakpoint now becomes an immediate strong hurdle. Any further recovery might still be seen as a selling opportunity near the 50-period SMA on the 4-hour chart, currently around the $18.80 region. This, in turn, should cap the XAG/USD near the $19.00 mark, which should now act as a pivotal point.

Silver 4-hour chart

Key levels to watch