Silver Price Analysis: XAG/USD drops below 10-DMA inside rising wedge
- Silver extends pullback from 200-DMA inside two-month-old bearish chart pattern.
- Momentum line’s retreat adds to the short-term bearish bias.
- Bulls need daily closing beyond 61.8% Fibonacci retracement for conviction.
Silver (XAG/USD) remains pressured around $24.80, extending the previous day’s losses during Friday’s Asian session. In doing so, the bright metal drops below the 10-DMA for the first time in two weeks.
That said, the quote’s failures to cross the 200-DMA join the gradual run-up since late September to portray a rising wedge bearish chart pattern on the daily (D1) formation. That said, the Momentum line also seems to have run out of steam, which in turn signals the further weakness of the commodity prices.
With that in mind, July’s low near $24.50 gains the market’s attention as immediate support ahead of the 38.2% Fibonacci retracement (Fibo) of the May-September downside, around $24.20.
It should be noted, however, that the quote’s weakness past $24.20, will be challenged by the $24.00 threshold and the wedge’s support line near $23.75, a break of which will confirm the bearish chart pattern to trigger the theoretical fall targeting fresh yearly low.
Meanwhile, 10-DMA and 50% Fibo., respectively around $24.90 and $25.10, guard short-term advances of the silver prices.
Following that, 200-DMA and the wedge’s resistance will challenge the XAG/USD bulls around $25.30 and $25.50 in that order.
Even if the silver buyers manage to defy the bearish chart formation by crossing the $25.50 hurdle, a 61.8% Fibonacci retracement level of $26.00 will be the key to follow.
Silver: Daily chart
Trend: Further weakness expected