Silver Price Forecast: XAG/USD seems vulnerable; ascending channel breakdown in play

• Silver remains depressed near a multi-week trough touched the previous day.

• The recent breakdown below an ascending channel favors the XAG/USD bears.

• Any attempted recovery is likely to face stiff resistance near the $37.00 mark.

Silver (XAG/USD) struggles to capitalize on the overnight modest rebound from the $36.20 area, or a nearly four-week low, and trades with a negative bias during the Asian session on Friday. The white metal currently trades around he $36.65-36.60 region, down 0.15% for the day, though it lacks follow-through selling as traders opt to wait for the release of the US Nonfarm Payrolls (NFP) report.

From a technical perspective, this week's breakdown below a nearly two-month-old ascending channel support, which coincided with the 200-period Simple Moving Average (SMA) on the 4-hour chart, was seen as a key trigger for the XAG/USD bears. Moreover, oscillators on the daily chart have just started gaining negative traction, suggesting that the path of least resistance for the commodity is to the downside.

However, the Relative Strength Index (RSI) on the 4-hour chart is already flashing oversold conditions and makes it prudent to wait for some near-term consolidation or a modest recovery before positioning for any further depreciating move. Nevertheless, the XAG/USD seems vulnerable to weaken further below the multi-week low, around the $36.20 region, and the $36.00 mark, towards the $35.50 support zone.

On the flip side, any meaningful recovery attempt is likely to confront a stiff barrier ahead of the $37.00 round figure. A sustained strength above, however, might trigger a short-covering rally, though it runs the risk of fizzling out near the $37.55-$37.60 confluence support breakpoint. The latter should act as a pivotal point, which, if cleared, will negate the negative bias and shift the bias in favor of the XAG/USD bulls.

Silver 4-hour chart