Silver Price Analysis: XAG/USD bears have the upper hand below $25.00 confluence

• Silver edged lower on Thursday and extended the overnight pullback from the $25.00 mark.
• The set-up favours bearish traders and supports prospects for a further depreciating move.
• Sustained strength beyond the $26.00 mark is needed to negate the near-term bearish bias.

Silver remained depressed through the early part of the European session and was last seen trading around the $24.75-$24.70 region, down over 0.50% for the day.

The overnight rejection near the 38.2% Fibonacci retracement level of the $22.00-$26.95 move up and the subsequent downtick favours bearish traders. Adding to this, the recent break through a confluence support, comprising the 200-hour SMA on the 4-hour chart and the lower end of an ascending trend channel, adds credence to the negative outlook.

Moreover, technical indicators on daily/4-hour charts have just started driting into the bearish territory and support prospects for a further near-term depreciating move. That said, traders are likely to wait for some follow-through selling below the 50% Fibo. level support, around mid-$24.00s before placing fresh bearish bets around the XAG/USD.

The downward trajectory could then drag spot prices back towards challenging the 61.8% Fibo. level support, around the $23.95-$23.85 region. The XAG/USD would then turn vulnerable and extend the fall towards testing the next relevant support around the $23.40-$23.35 region before eventually dropping to the $23.00 round-figure mark.

On the flip side, the 38.2% Fibo. level, around the $25.05 area, might continue to act as an immediate hurdle. Sustained strength beyond could allow the XAG/USD to accelerate the momentum and surpass the $25.40-$25.50 intermediate hurdle. The upward trajectory could further get extended towards reclaiming the $26.00 round-figure mark.

Silver 4-hour chart

Technical levels to watch