Silver Price Analysis: XAG/USD tumbles as bearish engulfing pattern looms
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•Silver prices see a significant drop to $24.75, shedding over 3% in response to a strengthening US Dollar.
•Technical analysis reveals a bearish engulfing pattern, despite a recent 'golden cross', signaling mixed signals for traders.
•The RSI indicates diminishing buying pressure, hinting at a potential bearish swing.
Silver's price plunged on Thursday amidst a risk-off impulse, reinvigorating the US Dollar. Consequently, the grey metal dropped more than $0.70, or 3.15%, as the XAG/USD traded at $24.75 after hitting a daily high of $25.77.
XAG/USD Price Analysis: Technical outlook
Silver is witnessing a downturn, as price action has formed a ‘bearish engulfing’ chart pattern in the last couple of days. Even though the 50-day moving average (DMA) has crossed above the 200-DMA, forming a classic ‘golden cross’ indicating that bulls are gathering steam, momentum suggests the opposite.
The Relative Strength Index (RSI) is hovering just below 60 after peaking around 70, indicating that moderate buying pressure remains. However, the RSI's descent from higher levels suggests that momentum might wane, and bears could gain ground.
The recent pullback has seen the price retreat from resistance near the $26.00 mark. Immediate support is found near December’s 22 high turned support at $24.60, followed by the $24.00 level. A breach of the latter could open a path towards the $23.00 area, marked by the previous cycle lows.
On the other hand, an XAG/USD daily close above $25.00 could pave the way for challenging yearly highs at $25.77, followed by last year’s high at $25.91.
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