- Silver drifts lower for the third successive day and hits over a one-month low on Friday.
- The overnight breakthrough the $24.50-40 horizontal support favours bearish traders.
- Some follow-through selling below the 38.2% Fibo. will set the stage for deeper losses.
Silver remains under some selling pressure for the third successive day on Friday and drops to sub-$24.00 levels, or over a one-month low heading into the European session.
From a technical perspective, the recent repeated failures near the $26.00 round-figure mark and the subsequent steep break through the $24.50-$24.40 strong horizontal support favours bearish traders. Moreover, oscillators on the daily chart are holding deep in the negative territory and are still far from being in the oversold zone. This might have already set the stage for a further near-term depreciating move for the XAG/USD.
The white metal, however, manages to find some support near the 50-day Simple Moving Average (SMA). This is followed by the 38.2% Fibonacci retracement level of the March-April rally, around the $23.75-$23.70 area, which if broken will reaffirm the negative bias. The XAG/USD might then test the 100-day SMA, currently pegged near the $23.40-$23.45 area, before eventually dropping to the 50% Fibo. level, around the $23.00 mark.
On the flip side, any meaningful recovery attempt might now confront stiff resistance near the $24.40-$24.40 support breakpoint, which coincides with the 23.6% Fibo. level. A sustained strength beyond could negate the bearish outlook and lift the XAG/USD to the $25.00 psychological mark en route to the $25.55-$25.60 resistance. Bulls might then make a fresh attempt to conquer the $26.00 mark and test the YTD peak, around the $26.10-$26.15 area.
Silver daily chart
