Spot silver (XAG/USD) prices have stabilised to the north of the $25.50 per troy ounce area on Friday amid a broadly subdued tone to trade across markets with conditions winding down ahead of the weekend. A test of Thursday’s weekly highs in the $25.80s was a possibility - which it eventually hit with our stop loss from the previous trade, but selling pressure ahead of the $26.00 level well continued to cap the price action. To the downside, previous highs from recent session in the $25.50 area should continue to offer support, as has already been the case in recent hours.

The quote rose to the fresh high nearly two weeks the previous day. However, failures to cross the 23.6% Fibonacci retracement (Fibo.) of February-March upside, near $25.80, joined bearish MACD signals to challenge XAG/USD upside afterward.

That said, the quote’s latest weakness eyes to retest the 10-DMA level of $25.16 before directing bears toward the 50% Fibo levels - from the hawkish perspective as presented in the previous analysis and the 50-DMA, respectively around $24.50 and $24.20.

On the contrary, fresh recovery may aim for a clear break of the 23.6% Fibo. level surrounding $25.80 before targeting the $26.00 threshold. But the odds have now shifted towards bearish pressure and we have changed the Fibo levels towards dovish perspective. That makes the market contemporarily standing below 61.8% fibo level. 

Even so, the support-turned-resistance line from early February, near $26.25 at the latest, becomes a tough nut to crack for the XAG/USD bulls.

In a case where the commodity prices rally beyond $26.25, the odds of witnessing an upside to the monthly high near $26.95 can’t be ruled out.

Below the aforementioned levels, we will be more favorable towards the silver being taken care of by the bears. 

61.8% Fibo Can Become a Reason For Strong Selling

Mar 27 2022