Silver Price Analysis: XAG/USD off monthly lows, not out of the woods yet
- Silver bounced off key support on the hourly chart after the slump.
- Hourly RSI rebounds from the oversold region, points north.
- 21-HMA to challenge XAG/USD’s pullback from monthly lows.
Silver (XAG/USD) paused its six-day losing streak, having hit fresh nine-week lows of $21.70 in early trades.
The bears take a breather after the recent slump, mainly driven by the relentless strength in the US dollar across its main competitors. A flight to safety amid growing fears over coronavirus resurgence and its implications on the global economy bolstered the haven demand for the greenback.
From a short-term technical perspective, the white metal is attempting a minor recovery after meeting strong demand at $21.70, the falling trendline support while the spot wavers in a potential falling channel formation.
To the upside, the bulls look to reclaim the critical 21-daily Simple Moving Average (DMA), currently at $23.02, for the recovery to gain momentum.
The hourly Relative Strength Index (RSI) has rebounded from within the oversold territory and points higher at 37.20, adding credence to the pullback.
A firm break above the 21-HMA barrier could open the door towards the falling trendline resistance at $23.60. The next upside target awaits at the downward-sloping 50-HMA of $23.78.
Alternatively, a rejection at the 21-HMA could reinforce the bearish bias, calling for a retest of the falling trendline support. A breach of the last could trigger a fresh sell-off towards the $20 mark.
Note that silver trades below all major moving averages on the hourly sticks, suggesting that the bulls to face an uphill task on the road to recovery.
XAG/USD: Hourly chart
