Silver extends the previous day's retracement slide from the $24.30 area, or over a one-week high, and remains under some selling pressure on Friday. The white metal maintains its offered tone through the mid-European session and is currently placed near the daily low, around the $23.45 region.

From a technical perspective, the XAG/USD has been attempting but failing to break above an important descending trendline drawn from the February 2021 highs for almost the whole of January. Bears appear to be winning the battle at this key level and pushing the exchange rate lower. Given that momentum oscillators on the daily, 4-hour and hourly charts have all been gaining some negative traction, a the bears look to be firmly back in the driving seat.

The base of an ascending channel on the hourly chart shown below has, at the latest update, already been broken suggesting the short-term trend is on the cusp of reversing lower.

Now XAG/USD may accelerate the fall towards intermediate support near the $23.50-$23.45 area before eventually dropping to test the key weekly low at around the $22.75 region touched on Monday. Some follow-through selling has the potential to drag the commodity further toward testing the next relevant support near the $22.00 round figure.

On the flip side, the daily swing high, around the $24.00 mark, might now act as an immediate hurdle. Any further move will confront tough age-old resistance from the multi-year trendline near the $24.50 region which is also a heavy supply zone. A sustained strength beyond and close on a daily basis above the major trendline should open the way higher and allow the XAU/USD to reclaim the $25.00 psychological mark for the first time since April 2022.

Silver to retest its intraday highs before going bearish

Jan 29 2023