Silver Drops Below $32.00; Downside Potential Seems Limited
Silver (XAG/USD) attracted some sellers at the start of a new week and dipped back below the $32.00 round-figure during the Asian session on Monday (4/14). The white metal, for now, seems to have snapped its three-day winning streak to over one-week highs touched on Friday, although the technical setup supports prospects for some dip-buying at lower levels.
Last week’s breakout beyond the 50% Fibonacci retracement level of the recent slump from the March swing high to fresh YTD lows touched last week was seen as a key trigger for bullish traders. However, the subsequent move higher struggled to find acceptance above the 61.8% Fibo. level. Moreover, oscillators on the daily chart are yet to confirm the positive outlook and warrant some caution before positioning for any meaningful move up.
Hence, it would be prudent to wait for some follow-through buying beyond the 200-period Simple Moving Average (SMA) on the 4-hourly chart, currently pegged around the $32.55-$32.60 region, before placing fresh bullish bets. XAG/USD might then aim to reclaim the $33.00 mark and climb further towards the 78.6% Fibo. level, around the $33.20 area, en-route the $33.50-$33.55 horizontal barrier and the $34.00 neighbourhood, or March swing highs.
Source: FXStreet
