XAG/USD retreats from the YTD peak and falls below the $25.00 level.
FUNDAMENTAL OVERVIEW:
- Silver continues its recent decline from the year-to-date peak, but the downside appears to be constrained.
- The current setup suggests favorable support opportunities, with potential for dip-buying around the mid-$24.00s.
- However, if weakness persists below this level, it could trigger renewed selling pressure and lead to further losses.
Silver (XAG/USD) continues to experience selling pressure for the second consecutive day on Tuesday, further retreating from last week’s year-to-date peak near the $25.45 mark. The metal continues its decline during the first half of the European session, reaching a new daily low around the $24.85-$24.80 range in the last hour.
The recent breach of the significant 200-day Simple Moving Average (SMA) and subsequent strength beyond the $24.50-$24.60 horizontal resistance level is encouraging signs for bullish traders. Additionally, although oscillators on the daily chart have retreated from their highs, they remain comfortably in positive territory. This suggests the possibility of dip-buying and advises caution before taking any additional bearish positions.
The eagerly awaited Federal Reserve meeting scheduled for March 19-20 is highly anticipated. Traditionally, a hawkish stance from the Fed, indicating potential interest rate hikes, tends to result in a decline in silver prices. Conversely, a dovish Fed could enhance silver’s appeal by reducing its global cost.
However, despite factors that typically prompt a price decline, silver’s recent surge indicates that traders may prioritize its relative affordability and potential for appreciation, regardless of the Fed’s position.
SILVER TECHNICAL ANALYSIS DAILY CHART:
Technical Overview:
Silver is trading within an up channel.
Silver is positioned above the 20&50 Moving Average (SMA).
The Relative Strength Index (RSI) is in the Buying zone, while the Stochastic oscillator suggests a Negative trend.
Immediate Resistance level: 25.41
Immediate support level: 24.79
HOW TO TRADE SILVER
After consolidating within a range, silver broke out to the upside and made a sharp upward movement. Currently, silver is encountering resistance at a certain level. It is now approaching a key support zone, and if it finds support within this zone, it may resume its upward trajectory.