The $ 25.70-65 confluence is the next relevant target for XAG / USD bears
- Silver contributed to post-FOMC losses, falling to new six-week lows on Thursday.
- The technical setup favors bearish traders and supports the prospect of further losses.
- Any attempted recovery could now be seen as an opportunity for bearish traders.
Silver failed to benefit from its positive intraday move and instead came under renewed selling pressure and extended its recent withdrawal from the $ 28.25-30 supply zone.
This was the fifth straight day of negative move, dragging XAG / USD to its lowest level since May 6, around the $ 26.25-20 region during the Central European session. The aforementioned area coincides with the 50% Fibonacci level of the sharp move higher from $ 23.78 to $ 28.75 and should now serve as a major hub for short-term traders.
Meanwhile, the overnight decline after the FOMC confirmed a short-term downtrend through a symmetrical triangle. A subsequent slide below the 100-day SMA and declining technical indicators on the daily chart reinforce the negative outlook. This, in turn, supports the prospect of an extension of the ongoing downtrend.
Therefore, a slide below the $ 26.00 mark in the direction of testing confluence support from $ 25.70 to $ 65 remains a clear possibility. The latter includes the very important 200-day SMA and the 61.8% Fibo. Level. A convincing breakdown on the downside could now leave XAG / USD vulnerable to challenge the key psychological level of $ 25.00.
On the flip side, the $ 26.65 (100-DMA) region appears to be acting as an immediate resistance. Any subsequent upward move could now be seen as a selling opportunity near the $ 26.85 zone (38.2% Fibo. This is followed by the $ 27.00 level and the triangle support breakpoint around the $ 27.15 region, which is the profits for should limit the XAG / USD.
XAG / USD daily chart
Technical levels to watch