The Silver Seems Vulnerable To Prolonging Its Recent Pullback| FXMAG.COM

Silver daily chart
1. Key levels to watch

Silver extends its sideways consolidative price move around the $22.00 mark on Tuesday.
The technical setup favours bearish traders and supports prospects for additional losses.
A sustained break below the 100-day SMA support is needed to confirm the negative bias.

Silver continues with its struggle to gain any meaningful traction on Tuesday and remains confined in a narrow range through the early European session. The white metal is currently placed around the $22.00 mark and seems vulnerable to prolonging its recent pullback from the $24.65 area, or the highest level since April 2022 touched earlier this month.

Last week's sustained break and acceptance below the 38.2% Fibonacci retracement level of the recent rally from October 2022 adds credence to the negative outlook. Furthermore, technical indicators on the daily chart are holding deep in the negative territory and are still far from being in the oversold zone. This, in turn, supports prospects for a further near-term depreciating move.

That said, bearish traders might wait for some follow-through selling below the 100-day SMA, currently around the $21.75 region, before placing fresh bets. The XAG/USD would then turn vulnerable to testing the 50% Fibo. level, around the $21.35 area. The downward trajectory could get extended further towards the $21.00 level en route to the 61.8% Fibo. level, around the $20.60-$20.55 zone.

On the flip side, a recovery above 38.2% Fibo. level, around the $22.15 area, is more likely to attract fresh sellers near the $22.60-$22.70 supply zone. This should cap the XAG/USD near the $23.00 mark, representing the 23.6% Fibo. That said, a convincing breakthrough the latter could offset the negative outlook and shift the near-term bias in favour of bullish traders.

The subsequent move up has the potential to lift the XAG/USD further towards reclaiming the $24.00 round-figure mark. Bulls might then aim back to challenge the $24.50 supply zone, which if cleared decisively should pave the way for a fresh leg up.