Silver Price Analysis: XAG/USD bears await sustained break below 61.8% Fibo. level
NEW YORK (March 2) Silver struggles to capitalize on this week's modest recovery gains recorded over the past two days and meets with a fresh supply on Thursday. The white metal remains depressed through the mid-European session and is currently placed near the lower end of its daily trading range, around the $20.80 region.
From a technical perspective, the XAG/USD, so far, has managed to hold its neck above the 61.8% Fibonacci retracement level of the recent rally from the October 2022 low. The said support is pegged near the $20.60 area, which is followed by the YTD low, around the $20.40 region touched earlier this week. A convincing break below the latter will be seen as a fresh trigger for bears and set the stage for an extension of the recent slide from the $24.65 zone, or a multi-month top set in February.
That said, oscillators on the daily chart are hovering near the oversold territory, making it prudent to wait for some near-term consolidation or a modest rebound before placing fresh bearish bets. Nevertheless, the lack of any meaningful buying suggests that the path of least resistance for the XAG/USD is to the downside. Hence, some follow-through weakness to the $20.00 psychological mark, en route to the next relevant support near the $19.75-$19.70 region, looks like a distinct possibility.
On the flip side, attempted recovery back above the $21.00 round figure now seems to confront some hurdle near the overnight swing high, around the $21.15-$21.20 area, ahead of the $21.35 region (50% Fibo. level). Any subsequent strength could be seen as a selling opportunity and runs the risk of fizzling out near the $22.00 confluence support breakpoint. The said handle comprises 100-day Simple Moving Average (SMA) and 38.2% Fibo. level, which if cleared could negate the bearish bias.
The XAG/USD could then witness a short-covering rally towards the $22.55-$22.60 supply zone, above which nulls might aim to reclaim the $23.00 round-figure mark, which coincides with the 23.6% Fibo. level.
FXStreet
