Silver Price Analysis: XAG/USD bears approach golden Fibonacci ratio below $23.00
- Silver Price remains sidelined at the lowest level in three months.
- Oversold RSI (14) conditions challenge XAG/USD bears near the key Fibonacci ratio.
- Clear downside break of previous key support line favors Silver bears.
- Multiple SMAs, seven-week-old falling resistance line also challenge Silver buyers.
Silver Price (XAG/USD) licks its wounds at the lowest level in three months, mildly bid near $22.70 amid Thursday’s Asian session after refreshing the multi-day low to around $22.50 the previous day. It’s worth noting that the XAG/USD’s sustained downside break of a three-month-old rising support line and the 50% Fibonacci retracement of March-May upside seems to keep the Silver bears hopeful.
However, the overbought RSI (14) line suggests limited downside room for the Silver bears to cheer, which in turn highlights the 61.8% Fibonacci ratio, also known as the golden Fibonacci ratio, for the XAG/USD bears to prod, around $22.30.
In a case where the Silver price ignores oversold RSI (14) and breaks the key Fibonacci retracement ratio, the mid-March swing low of near $21.50 and the early March high og near $21.30 can act as the last defense of the XAG/USD buyers.
On the contrary, the 50% Fibonacci retracement level and the support-turned-resistance line, respectively near $23.00 and $23.60 restrict short-term recovery of the Silver Price.
Though, a convergence of the 50-SMA, 100-SMA and 200-SMA, around $23.80, appears a tough nut to crack for the Silver buyers past $23..60.
Even if the XAG/USD quote rises past $23.60, the bulls need to cross a downward-sloping resistance line from early May, around $24.05, to welcome the Silver buyers.
Silver Price: Four-hour chart
Trend: Limited downside expected