January 29, 2023

XAG/USD bears eye $22.50 during two-day downtrend

  • Silver remains on the back foot after breaking 13-day-old support the previous day.
  • U-turn from the key moving averages, receding bullish bias of MACD favor sellers.
  • Monthly horizontal support-zone, 78.6% Fibonacci retracement to restrict short-term downside.

Silver (XAG/USD) grinds lower around $22.75, down 0.60% intraday, heading into Tuesday’s European session.

The bright metal reversed from a convergence of the 100-DMA and 50-DMA while breaking an upward sloping trend line the previous day. Adding to bearish bias is the MACD line’s inability to cross the 0.0000 mark, recently down.

Even so, horizontal area from the mid-December and 78.6% Fibonacci retracement of September-November upside, respectively near $22.50 and $22.25, will challenge the short-term XAG/USD downside.

During the silver’s further declines past $22.25, the $22.00 threshold may act as a buffer ahead of September’s low near $21.40.

Meanwhile, the corrective pullback may initially aim for the previous support line, close to $23.00, before heading towards the stated DMA confluence around $23.35.

Even if the XAG/USD bulls cross the $23.35 hurdle, the 50% Fibonacci retracement level of $23.45 will probe the upside momentum.

Silver: Daily chart

Trend: Further weakness expected


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