- Silver remained depressed near the weekly low hit the previous day.
- The setup favors bearish traders and supports the outlook for further losses.
- A sustained move beyond the $22.00 mark is needed to undo the bearish bias.
Silver hovered in a range just above mid-$21.00 during the first half of the European session and consolidated the previous day’s decline to more than a 1-week low.
Given the recent failures near the 200-period SMA on the 4-hour chart, acceptance below the $22.00 mark could be seen as a new trigger for bearish traders. Additionally, the technical indicators on the hourly/daily charts are holding in bearish territory and adding credence to the short-term negative outlook for XAG/USD.
Some follow-up selling below the $21.50-$21.45 area would reaffirm the bearish bias and pave the way for further losses. XAG/USD could then drop to $21.00 with intermediate support near the $21.30 area. The downward trajectory may extend to the year-to-date low around the $20.45 region hit on May 13.
On the other hand, any attempts at recovery may now be met with strong resistance near the $21.90-$22.00 support breakout. The said region also marks a confluence barrier comprising the 200-period SMA on the 4-hour chart and the corrective bounce from $20.46 to $22.52, which should now act as a key pivot for short-term traders.
Sustained strength beyond that could trigger a short hedging move and pull spot prices back towards the monthly high, around the mid-$22.00 hit earlier this week. The momentum could then allow the bulls to reclaim the $23.00 mark and further lift XAG/USD towards the next relevant hurdle near the $23.30 region.