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- XAG / USD hit a new low for the year at USD 22.03.
- The daily chart is showing a downtrend, but a double bottom pattern limits further losses.
- Unless it breaks above $ 22.50-60 on the 1 hour chart, silver will continue its downtrend.
After losing three days in a row, hitting a new low of $ 22.03 in 2021, silver is trading at $ 22.48 again, posting a 0.97% gain at the time of writing.
XAG / USD daily chart
Silver is in a downtrend as the daily moving averages (DMA’s) stay well above the spot price. XAG / USD trades near the 2021 lows, within the range of $ 22.00 to $ 50. The first support on the downside would be the September 20th low of $ 22.03. A break in the latter would expose the September 24, 2020 low of $ 21.65.
On the other hand, a double-bottom pattern forms. A break above $ 23.00 could see $ 24.00 as the first level of resistance. A daily close above this level will push XAG / USD towards the 50-day moving average at $ 24.24, followed by the September 3rd high at $ 24.86.
The “cutout” of the raised floor is in this area. A major break in this supply zone could drive price towards the confluence of the 100 and 200 DMAs around $ 26.00.
The Relative Strength Index is at 33 and is targeting up, but the downtrend remains intact as it stays below the 50 centerline.
XAG / USD 1 hour chart
When zooming in on the 1 hour chart, XAG / USD is in an uptrend. However, in the $ 22.50- $ 60 range, a downtrend line limited the upside. A break above this could pave the way for further gains. The first resistance would be the 100 simple moving average (SMA) at $ 22.78. The following coverage zones would be at $ 23.00 and the 200 SMA would be at $ 23.81.
On the other hand, a failure at USD 22.50-60 then XAG / USD could continue its downtrend. The initial support would be the 50 SMA at $ 22.38. The following demand zones would be $ 22.16 and a 2021 low of $ 22.03
The Relative Strength Index is 53 and is moving towards the 50 centerline. If the RSI moves below the latter, it could put downward pressure on XAG / USD.
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