Market Analysis

Silver (XAG/USD) encounters some selling pressure after an intraday rise to the $27.25-$27.30 range, marking a decline for the third consecutive day during the early European session on Wednesday. Despite this, the white metal maintains its position above a three-month low reached on Monday and is currently trading around the $27.00 level.

The recent break below the crucial 200-day Simple Moving Average (SMA) and repeated failures near the $29.00 level suggest a bearish outlook. Technical indicators on the daily chart are deeply negative and not yet in oversold territory, reinforcing the bearish sentiment and indicating that the path of least resistance for XAG/USD is downward.

Traders might await a further decline below the weekly low, around the mid-$26.00 range, before committing to the next bearish move. XAG/USD could then accelerate its descent towards the $26.00 level, potentially reaching the next significant support at the $25.65-$25.60 range. The downward trend might continue, targeting the $25.00 psychological mark and the $24.45-$24.40 horizontal support.

Conversely, any substantial recovery effort will likely face strong resistance near the recent high around the $27.55-$27.60 range. Sustained momentum beyond this level could trigger a short-covering rally, propelling XAG/USD past the $28.00 mark towards the 200-day SMA, now a resistance level around $28.80. The $29.00 level is expected to remain a significant barrier to further gains.

Paraphrasing text from "FX Street" all rights reserved by the original author.