Silver Price Analysis: XAG/USD seems vulnerable near $22.00 mark, 23.6% Fibo. level

• Silver remained under some selling pressure for the second successive day on Thursday.
• A convincing break below the 23.6% Fibo. level is needed to confirm a bearish breakdown.
• Sustained strength beyond the $22.50-$22.60 supply zone would negate any negative bias.

Silver struggled to capitalize on the overnight bounce from a multi-day low, around the $21.80 region and edged lower for the second successive day on Thursday. The white metal remained depressed through the first half of the European session and was last seen hovering around the $22.00 mark, just above the 23.6% Fibonacci retracement level of the $26.22-$20.46 downfall.

Given that the XAG/USD has repeated failed to make it through the 200-period SMA resistance on the 4-hour chart, a sustained break below the latter would be seen as a fresh trigger for bearish traders. Moreover, technical indicators on daily/hourly charts, so far, have been struggling to gain any meaningful traction, adding credence to the negative outlook.

Some follow-through selling, leading to a convincing break below the $21.50 area, would reaffirm the bearish bias and pave the way for further losses. Spot prices could then fall to the $21.00 mark with some intermediate support near the $21.30 zone. The downward trajectory could further get extended and expose the YTD low, around the $20.45 region touched on May 13.

On the flip side, move beyond the 200-period SMA on the 4-hour chart is likely to confront resistance near the $22.30 region. Any subsequent strength might continue to attract some selling and remain capped near the $22.50-$22.60 supply zone, or the 38.2% Fibo. level. A convincing break through the said barrier could shift the bias in favour of bullish traders.

The momentum could then allow bulls to reclaim the $23.00 mark and lift the XAG/USD further towards the next relevant hurdle near the $23.30 region, or the 50% Fibo. level.

Silver 4-hour chart

Key levels to watch