Silver Falls Sharply, Breaks $36.00 Support
Silver is seen extending its retracement slide from the highest level since February 2012 touched earlier this week and weakened for the third straight day on Friday. The downward trajectory dragged the white metal to its lowest level in over a week, around the $35.65 area during the Asian session.
From a technical perspective, XAG/USD’s failure to extend this week’s up-move beyond the $37.00 mark and a subsequent fall below the 23.6% Fibonacci retracement level of the May-June rally favors bearish traders. Moreover, oscillators on the 4-hourly chart have been gaining negative traction and support the case for a further depreciating move. That said, it would still be prudent to wait for some follow-through selling below mid-$35.00s, or the 100-period Simple Moving Average (SMA) on the 4-hourly chart, before positioning for deeper losses.
XAG/USD could then accelerate the corrective slide towards the 23.6% Fibo. 38.2%, around the $35.15 region, en route to the psychological $35.00 level. The downward trajectory could extend further towards the $34.75 intermediate support before the commodity eventually drops to the $34.45 area or the 50% retracement level. The latter will act as a key pivotal point, which if broken decisively will suggest that the white metal has topped out and pave the way for some meaningful depreciating move in the near term.
Source: FXStreet
