- Silver sees some selling on Wednesday for the third straight day.
- Acceptance below the 50 DMA supports the prospects for additional losses.
- Any attempted recovery move could now be viewed as a selling opportunity.
Silver is struggling to benefit from yesterday’s late rebound and will face fresh offer near the $20.25-$20.30 region on Wednesday. The white metal remains depressed for the third straight day, slipping back below the psychological $20.00 level in the first half of the European session.
The XAG/USD pair is currently trading above a one-week low that was hit on Tuesday. It hit and was rejected by the 200-week SMA resistance in the upper $20 areas and now appears to have found acceptance below the 50-day SMA which stands at $20.11, both bearish insignia. The bulls are now eyeing the 38.2% Fibonacci retracement level of the $22.52 to $18.15 crash in the $19.80 region to provide some support. A convincing downside break would expose the next relevant support near the $19.55 area (last week’s swing low).
The latter should now act as a central linchpin that would see a fresh trigger for bearish traders on a decisive break and leave XAG/USD vulnerable. Spot prices could then accelerate the decline towards the 23.6% Fibo. Level, around the $19.20-$19.15 region, on the way to $19.00. The downside could extend further towards the $18.45-$18.40 range.
On the other hand the 50% Fibo. Levels around the $20.35 region are now turning into an immediate strong hurdle. Any subsequent move higher could be seen as a selling opportunity near the $20.65 horizontal zone and remain capped near the 61.8% Fibo. Levels around the $20.85 region. However, some follow-up buying above the $21.00 level could negate the negative outlook for XAG/USD.
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