Silver continues its overnight drop back into the $19.00 neighborhood. The technical configuration promotes the possibility of more losses and is in the bears’ favor. To counteract the bearish bias, there must be a prolonged advance above the $19.00 level.

On Wednesday, further selling pressure is applied to silver, which causes it to prolong the day before a slight decline from around the $19.00 level. Throughout the first part of the European session, Silver remained on the back foot; it is now dangerously close to the daily low, somewhere in the mid-$18.00 range.

Technically speaking, the current recovery from a low reached last Friday, which was almost three weeks ago, risks rejection close to the 100-hour EMA. The oscillators on the 1-hour chart are again beginning to acquire negative traction, while oscillators on the daily chart remain in the bearish region. This strengthens the likelihood that the intraday depreciating trend will continue.

A continuing decline towards testing crucial support, around the $18.00 level, is still a real possibility. A small amount of follow-through selling will be seen by bearish traders as a new trigger, pushing the Silver price down towards the YTD low, or about $17.55. Spot prices may decline to the next significant support close to $17.00.

On the other hand, the 100-hour SMA, priced between $18.90 and $19.00, can operate as a temporary barrier. A sustained rise above might set off a rally for short-covering, lifting XAG/USD into the $19.70–$19.80 supply zone on the way to the psychological $20.00 level. The latter should serve as a turning point for bulls and, if cleared, should open the door for further gains.

The next upward movement might push the XAG/USD higher over the $20.50 intermediate barrier and back towards regaining the $21.00 level, which is also the 200-day EMA.

1-hour silver chart