Nov 29, 2021, 05:29 AM ET
By: AnalysisWatch
The silver price regained momentum on the first day of the new week, recovering most of its slide on Friday to below $23.00, the lowest level since October 14. The white metal maintained its uptrend in the first half of the European session and last traded just below $23.00, up nearly 1% on the day.
On a broader level, the recent sharp pullback from the mid-$25.00 level stalled near the 61.8% Fibonacci level of the strong $21.42-$25.41 advance. This level is now likely to act as a key pivot point for short-term traders, which, if decisively breached, should pave the way for further short-term losses.
Considering the sustained break below the 100-day SMA last week and the ascending channel confluence support, the bias seems to be clearly in favor of downside traders. The negative outlook for the XAG/USD is reinforced by bearish technical indicators on the daily chart, which are still far from being in oversold territory.
Therefore, any subsequent positive move towards the $23.70-75 region could still be seen as a selling opportunity and remain capped near the $24.00 convergence point. The latter coincides with the 38.2% Fibo level, the breach of which could shift the bias in favor of the bulls and push the XAG/USD towards the $24.45-50 area.
On the other hand, the $23.10-$23.50 area could now protect the immediate downtrend. A convincing break below it would reinforce the bearish bias and leave XAG/USD vulnerable. The next relevant support is in the $22.70-65 area, below which the commodity could eventually fall to test the $22.30-25 support on the way to the $22.00 level.
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