Silver transitions into a bearish consolidation phase and trades in a constrained range at the $20.00 level. The technical configuration favors the possibility of extending the current, well-established decline. A slightly oversold RSI prevents bearish traders from making new bets on the daily chart.
By the middle of the European trading day on Thursday, silver continues to trade sideways and consolidate at the crucial $20.00 level. On the other hand, silver is still very close to Wednesday’s four-month low and is susceptible to continuing its downward trend seen since early February.
A new trigger for pessimistic traders was the recent collapse of a 200-day EMA, a technical moving average. This week’s continuing decline below the $20.50–$20.40 horizontal support, which corresponded with the previous YTD low, strengthens the pessimistic picture. This, in turn, implies that the down is the direction of least resistance for the XAG/USD.
Nonetheless, the daily chart’s relative strength index (RSI) circles in the oversold region. Also, it is advised to wait to put new wagers on the XAG/USD until there has been a short-term consolidation after many attempts to gain acceptance below the $20.00 psychological level have failed. But, the metal’s failure to find buyers indicates that the short-term downward trend still needs to be finished.
As a result, a subsequent decline toward testing the $19.60 intermediate support on the way to the $19.00 round-figure barrier is quite likely. Before the XAG/USD ultimately descends to the $18.30-$18.25 horizontal zone and the $18.00 level, which could give solid support, some follow-through selling might pave the way for a decline towards the next pertinent support around the $18.80-$18.75 area.
On the other hand, the $20.40–$20.50 support breakpoint seems to be acting as a barrier right away. Any additional rebound will likely draw new buyers and be restrained close to the 200-day Simple Moving Average (SMA), now set just above the $21.00 level. The latter should serve as a turning point, and if it is convincingly cleared, it might push the XAG/USD to the mid-$21.00 range. Next, the Bulls can try to retake the $22.00 level.
Silver daily chart
