Silver Price Forecast: XAG/USD trades around $40.50 after breaking below 14-year highs

LONDON (September 2) Silver price (XAG/USD) halts its five-day winning streak, trading around $40.30 per troy ounce during the European hours after retreating from $40.85, the highest since September 2011, reached on Tuesday. The technical analysis of the daily chart suggests the price of the precious metal rises upwards within an ascending channel pattern, strengthening the bullish bias.

The 14-day Relative Strength Index (RSI) has moved slightly below the 70 level, suggesting a retreat after reaching an overbought region. However, the Silver price may regain ground as the market sentiment is still bullish. Additionally, the Silver price is trading above the nine-day Exponential Moving Average (EMA), indicating that short-term price momentum is stronger.

On the upside, the XAG/USD pair may test the recently marked 14-year high at $40.85, followed by the psychological level of $41.00.

The Silver price may find its primary support at the nine-day EMA of $39.37, followed by the ascending channel’s lower boundary around $39.10. A break below the channel would weaken the bullish bias and put downward pressure on the metal price to reach the 50-day EMA of $37.78.

Further declines would dampen the medium-term price momentum and prompt the Silver price to navigate the region around the three-month low at $35.80, recorded on July 1.

FXStreet