XAG/USD is struggling near the bottom of the 1-week-old range
- Silver fell for the second day in a row, falling back closer to the weekly low.
- The setup favors bearish traders, although the lack of a follow-through warrants some caution.
- Sustained move above 61.8% Fibo. is required to negate the short-term negative outlook.
Silver saw some selling for the second straight day on Thursday, falling closer to the bottom of its weekly range during the first half of the European session. The white metal last traded around the $21.80 region, down 0.85% for the day.
From a technical perspective, the recent recovery from the YTD low has stalled near resistance marked by the 61.8% Fibonacci retracement level of the $23.24 to $20.46 crash. The subsequent decline favors bearish traders amid bearish oscillators on the daily/hourly charts.
However, the range-bound price action observed over the past week suggests indecisiveness about the near-term direction of XAG/USD. Therefore, it is prudent to wait for a break below the trading range support near the $21.65-$21.60 area before placing fresh bearish bets.
Some follow-up sales below the 38.2% Fibo. Levels around the mid-$21.00 will confirm the negative bias. XAG/USD could then slide below the $21.30-$21.25 region and accelerate the crash towards the 23.6% Fibo. level, around the $21.15 area, en route to the $21.00 mark.
The downside momentum could extend further, pulling spot prices back towards the YTD lows, around the $20.45 region touched earlier this month. The latter should act as a fulcrum which, if broken, would make XAG/USD vulnerable to challenge the psychological $20.00 level.
On the downside, any meaningful recovery attempt past the $22.00 round number could face strong resistance near the $22.20 region (61.8% Fibo level). Closely followed by the $21.35 hurdle, above which the XAG/USD pair could scale to the $22.65 area.