Silver Price Analysis: XAG/USD seems vulnerable below $26.75-80 confluence breakpoint

March 3, 2021

Silver reversed a modest intraday dip and climbed to the top end of its daily trading range, around the $26.75-80 area during the early European session, albeit lacked follow-through.

The mentioned region coincides with a confluence support breakpoint that comprised of 200-period SMA on the 4-hourly chart and a short-term ascending trend-line extending from mid-January. This, in turn, should now act as a key pivotal point for short-term traders.

Meanwhile, technical indicators on the 1-hourly chart have been gaining traction but are yet to confirm a bullish bias on 4-hourly/daily charts. This makes it prudent to wait for some follow-through buying beyond the support-turned-resistance before placing bullish bets.

Any subsequent move beyond might confront a strong barrier near the $27.00 area. That said, a convincing breakthrough will negate the near-term bearish bias and push the XAG/USD back towards the $28.00 mark with some intermediate resistance near the $27.60-65 region.

On the flip side, immediate support is pegged near mid-$26.00s. Sustained weakness below will be seen as a fresh trigger for bearish traders and set the stage for an extension of the white metal's recent sharp pullback from the key $30.00 psychological mark.

The XAG/USD might then accelerate the fall towards the $26.00 mark before eventually dropping to the $25.45-35 congestion zone. The downfall could further get extended towards the $25.00 level en-route the $24.75-70 area and YTD lows, around the $24.00 mark.

by FXStreet

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