Silver Price Analysis: XAG/USD remains on the defensive near $26.00 mark

Silver seesawed between tepid gains/minor losses around the $26.00 mark and consolidated the overnight retracement slide from the $26.60-65 resistance  |  23/04/2021 10:51
  • Silver faced rejection near a short-term ascending channel resistance on Thursday.
  • The mentioned channel constitutes the formation of a bearish flag chart pattern.
  • Sustained break through pattern support is needed to confirm the bearish bias.

Silver seesawed between tepid gains/minor losses around the $26.00 mark and consolidated the overnight retracement slide from the $26.60-65 resistance zone.

The mentioned area marks the top boundary of a short-term ascending trend-channel extending from YTD lows, around the $23.80-75 region touched in March. Given the recent sharp pullback from the key $30.00 psychological mark, the channel now seemed to constitute the formation of a bearish flag chart pattern.

Meanwhile, technical indicators on the daily chart have just started moving into the positive territory and are yet to confirm a bearish bias on the 4-hour chart. This, in turn, makes it prudent to wait for a sustained break through the channel support, around the $25.70-65 region before placing fresh bearish bets.

The said support coincides with the 200-period SMA on the 4-hour chart, which if broken decisively will confirm a breakdown and set the stage for a sharp near-term depreciating move. The XAG/USD might then accelerate the downfall towards the key $25.00 psychological mark before dropping to the $24.65-60 horizontal support.

Some follow-through selling would turn the XAG/USD vulnerable to slide towards challenging the $24.00 mark. The downward trajectory could further get extended towards YTD lows, around the $23.80-75 region, en-route the $23.20 support zone.

On the flip side, any meaningful positive move might continue to confront some resistance near the $26.60-65 region. This, in turn, should cap the XAG/USD near the trend-channel hurdle, currently near the $26.85 region. A convincing breakthrough will negate the bearish outlook and prompt some aggressive short-covering move.

The XAG/USD might then accelerate the move to reclaim the $27.00 mark before darting towards the $27.65-70 area.

XAG/USD 4-hour chart

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Technical levels to watch

 

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