Silver Price Technical Forecast: Seven-Week Plunge Hits Major Support

[MongiIG]

Jul 12, 2022 | DailyFX
Michael Boutros, Strategist

SILVER TECHNICAL PRICE FORECAST: XAG/USD WEEKLY TRADE LEVELS

• Silver price updated technical trade levels - Weekly Chart
• XAG/USD attempting to mark seventh weekly sell-off into critical support zone
• Weekly support 18.28/69 (critical), 16.66, 15.47/59 – resistance 20.86-21.13. 23.28 (key)

SILVER PRICE CHART - XAG/USD WEEKLY

Chart Prepared by Michael Boutros, Technical Strategist; Silver on Tradingview

Notes: Silver is testing a key technical support zone this week at 18.28/69- a region defined by the 100% extension of the 2021 decline, the 2017 swing high and the 61.8% Fibonacci retracement of the 2021 rally. The sell-off is attempting to mark the seventh consecutive weekly decline – a feat not achieved since August of 2018. That instance was a ten-week sell-off which eventually saw another 5.7% decline before registering a multi-year low. Although the broader outlook remains weighted to the downside, we’re on the lookout for possible price inflection into this critical support confluence this week.

A break lower from here would threaten another accelerated decline towards the February 2020 high-week close at 16.66 backed by the objective 2019 yearly open / 78.6% retracement at 15.47/59- both levels of interest for possible downside exhaustion IF reached. Initial resistance is eyed back at 20.86-21.13 with a breach / weekly close above the 52-week moving average / yearly open at 23.22/28 needed to invalidate the yearly downtrend.

Bottom line: Silver is now testing a pivotal support zone and leaves the immediate short-bias vulnerable while above 18.28. From a trading standpoint, a good zone to reduce short-exposure / lower protective stops – rallies should be capped by the objective monthly open at 20.28 IF price is indeed heading lower on this stretch. I’ll publish and updated Silver Price Outlook once we get further clarity on the short-term XAG/USD technical trade levels.