XAG / USD hangs near the USD 25.00 mark, remains vulnerable

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  • Silver saw new sales Thursday, undermining some of the recovery gains made overnight.
  • The lineup remains sloping in favor of bearish traders and supports the prospect of further losses.
  • Sustained move back above the $ 26.00 mark is required to negate the short-term bearish bias.

Silver struggled to benefit from the previous day’s good recovery move from its lowest level since April 13th, instead encountering some offer on Thursday. The commodity remained depressed during Central European trading hours and most recently moved near the daily lows around the key psychological level of USD 25.00.

With continued break below the $ 25.70-65 confluence support this week, the surge of new sales supports the prospect of extending the week-old downtrend. The mentioned region included the very important 200-day SMA and the 61.8% Fibonacci level of the upside move from $ 23.78 to $ 28.75, which should now act as the fulcrum for short-term traders.

The negative outlook is compounded by the fact that the technical indicators on the daily chart are deep in the bearish territory and are nowhere near oversold. Subsequent weakness below the overnight swing lows in the $ 24.75 area will reinforce the bearish outlook and pave the way for a slide towards the round $ 24.00 mark.

On the flip side, the $ 25.25-30 region now appears to have turned out to be an immediate hurdle. Any subsequent positive move could be viewed as a selling opportunity near the breakpoint of confluence of $ 25.70-65. This in turn should dampen further gains for the XAG / USD near the round $ 26.00 mark which, if removed, could result in a short covering move.

Silver daily chart

Technical levels to watch

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