- Silver remains confined in a four-day-old trading range above the $25.00 mark.
- The formation of a rectangle might be seen as a bearish continuation pattern.
- Any attempted recovery is likely to remain capped near the $25.65-70 region.
Silver extended its sideways consolidative price action and remained confined in a narrow trading band, above the key $25.00 psychological mark heading into the North American session.
Looking at a slightly broader picture, the XAG/USD has been oscillating in a range over the past four trading sessions. This constitutes the formation of a rectangle on intraday charts. Given last week’s sustained break below the 200-day SMA support near the $25.70-65 area, the rectangle might still be categorized as a bearish continuation pattern.
The negative outlook is reinforced by the fact that technical indicators on the daily chart are holding in the bearish territory. This, along with the emergence of fresh selling near the previous monthly swing lows support breakpoint, around mid-$25.00, favours bearish traders and supports prospects for a further near-term depreciating move.
Hence, a subsequent fall back towards challenging the recent lows, around the $24.75 region, remains a distinct possibility. Some follow-through selling will be seen as a fresh trigger for bearish traders and turn the XAG/USD vulnerable to accelerate the slide further towards the $24.00 mark en-route YTD lows, around the $23.80-75 region.
On the flip side, attempted move up might continued to confront stiff resistance near the $25.50 region. Any subsequent strength might be seen as a selling opportunity and runs the risk of fizzling out rather quickly near the $25.70-65 region (200-DMA), which should now act as a pivotal point for short-term traders.
Silver 4-hour chart
Technical levels to watch