XAG/USD hangs near one-week low, just above $19.50 support

NEW YORK (Oct 10) Silver remains under some selling pressure on Monday and extends last week's pullback from the $21.25 area or the highest level since late June. The white metal maintains its offered tone through the early part of the European session and drops to a one-week low, around the $19.70-$19.65 region in the last hour.

The XAG/USD is currently placed just below the 38.2% Fibonacci retracement level of the recent recovery from the YTD low, though has managed to hold above the 100-period SMA on the 4-hour chart. The latter, currently around the mid-$19.00s should now act as a key pivotal point. A sustained break below will be seen as a fresh trigger for bearish traders and pave the way for additional losses.

The subsequent downfall has the potential to drag the XAG/USD towards the 61.8% Fibo. level, around the $19.20 region. This is closely followed by the $19.00 mark, which if broken decisively will suggest that the corrective bounce has run out of steam and pave the way for additional losses. Spot prices could then accelerate the fall towards the $18.60 intermediate support en route to the $18.35 region and the $18.00 round figure.

On the flip side, the $20.00 psychological mark, coincides with the 38.2% Fibo. level, now seems to keep a lid on any intraday move-up. Any subsequent move up could attract some sellers and remain capped near the 23.6% Fibo. level, around the $20.40 region. Sustained strength beyond will negate any near-term negative bias and lift the XAG/USD to the $20.80-$20.85 area en route to the $21.00 mark and the monthly high, around the $21.25 region.

FXStreet