Silver / U.S. DollarShort
Spot Silver Echoing Bearish Vibe
Spot silver (XAG/USD), in dollar terms, fell sharply last week. Shedding -7.3%, its largest one-week drop this year, landed the precious metal at weekly support from $22.42. This follows weekly resistance welcoming price action at $25.87 earlier in the year. Clearance of current support may pave the way for a run towards support coming in at $20.82. While sentiment on the weekly timeframe has been largely to the downside since early 2021, the medium-term direction is difficult to judge. Since bottoming in August 2022 until hitting a high of $26.14 (testing the above-noted resistance level), the medium-term bias was tilted to the upside. However, last week’s push lower has seen a lower low form and swung the technical pendulum potentially back in favour of sellers.
Drilling down to the daily timeframe, I see the unit engulfed support at $22.56-$22.96 and subsequently retested the lower side of this base last week. Alongside room to push lower on the Relative Strength Index (RSI) toward oversold territory, the daily price chart also exhibits scope to navigate lower levels this week toward a harmonic bat pattern’s potential reversal zone (PRZ) between $20.13 and $20.84.
Shorter-term price action on the H1 timeframe shows silver completed an ‘alternate’ AB=CD bearish configuration heading into US hours on Friday, denoted by a 1.272% Fibonacci projection ratio at $22.60 which was complemented by a 78.6% Fibonacci retracement ratio at $22.68. AB=CD shorts would have likely reduced risk to breakeven ahead of the close (some will have also liquidated the position in order to avoid weekend risk). Downside support to be conscious of on the H1 scale is seen at $22.18, positioned close by Friday’s session low of $22.11 and the $22.00 psychological base.
As a result of the above analysis, knowing the daily timeframe has consumed notable support ($22.56-$22.96) and ended the week retesting its lower side, in addition to room seen for the unit to push lower on the H1 timeframe, this emphasises a bearish vibe this week and places a bold question mark on weekly support at $22.42.
Drilling down to the daily timeframe, I see the unit engulfed support at $22.56-$22.96 and subsequently retested the lower side of this base last week. Alongside room to push lower on the Relative Strength Index (RSI) toward oversold territory, the daily price chart also exhibits scope to navigate lower levels this week toward a harmonic bat pattern’s potential reversal zone (PRZ) between $20.13 and $20.84.
Shorter-term price action on the H1 timeframe shows silver completed an ‘alternate’ AB=CD bearish configuration heading into US hours on Friday, denoted by a 1.272% Fibonacci projection ratio at $22.60 which was complemented by a 78.6% Fibonacci retracement ratio at $22.68. AB=CD shorts would have likely reduced risk to breakeven ahead of the close (some will have also liquidated the position in order to avoid weekend risk). Downside support to be conscious of on the H1 scale is seen at $22.18, positioned close by Friday’s session low of $22.11 and the $22.00 psychological base.
As a result of the above analysis, knowing the daily timeframe has consumed notable support ($22.56-$22.96) and ended the week retesting its lower side, in addition to room seen for the unit to push lower on the H1 timeframe, this emphasises a bearish vibe this week and places a bold question mark on weekly support at $22.42.
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