XAGUSD SIGNAL 19-05-22 : XAGUSD could slide back to retest YTD low, around $20.45 region.

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XAGUSD SIGNAL

XAGUSD SIGNAL 19-05-22 : XAGUSD could slide back to retest YTD low, around $20.45 region.

  • Silver prolonged this week’s retracement slide and edged lower for the second straight day.
  • The set-up favours bearish traders and supports prospects for a further depreciating move.
  • Sustained move beyond the $22.00 mark is needed to negate the near-term negative bias.

Silver witnessed some selling for the second straight day on Thursday and extended this week’s pullback from the 50% Fibonacci retracement level of the $23.24-$20.46 downfall. The white metal remained depressed through the first half of the European session and was last seen trading around the $21.30-$21.35 region, down nearly 0.50% for the day.

XAGUSD SIGNAL : Looking at the broader picture, the overnight slide confirmed a breakdown through the lower end of an ascending trend channel, which constituted the formation of a bearish flag pattern. Subsequent weakness below the 50-period SMA on the 4-hour chart adds credence to the negative set-up and supports prospects for further losses.

Moreover, technical indicators on the daily chart are still holding deep in the negative territory and have again started gaining bearish traction on the 4-hour chart. Hence, some follow-through decline towards testing the 23.6% Fibo. level, around the $21.15 region, en-route the $21.00 mark, remains a distinct possibility.

XAGUSD SIGNAL : The downward trajectory could further get extended and allow bearish traders to aim back to challenge the YTD low, around the $20.45 region touched last week.

On the flip side, the 38.2% Fibo. level, near the $21.55 area, should now act as immediate resistance. Any subsequent move up is more likely to confront resistance near the overnight swing low, around the $21.75 region. This is followed by the 50% Fibo. barrier, just ahead of the $22.00 mark, which if cleared might trigger a short-covering rally.

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