Silver slides below $24.00 level following bearish pennant break
- Silver has traded largely on the back foot on Thursday, following a bearish break of a recent pennant structure.
- XAG/USD has slipped beneath $24.00 and eyes test of monthly lows above $23.20.
Spot silver (XAG/USD) prices have been on the back foot in recent trade amid a pick up in the dollar, which has been driven by rising concerns over the worsening global economic outlook for the coming months as the US and other countries face rising Covid-19 cases and lockdowns. XAG/USD currently trades below the $24.00 level and nurses losses on the day of slightly more than 40 cents, or 1.8%.
XAG/USD sees bearish break of recent pennant, implying further downside likely
As flagged in yesterday’s article on silver, the precious metal had been seeing its price action squeezed within a pennant structure since the start of the month. During Thursday’s Asia session, a decisive downside break of the supporting uptrend of the pennant ensued, with the commodity dropping through previous weekly lows at $24.20 and then below the $24.00 level.
Silver also briefly broke below support in the form of the low of 11 November at $23.78 but has since recovered back above and is, for now, rangebound between $23.80 and $24.00. The next level of downside support is the 9 November low at just above $23.50, then the 4 November low at $23.22.
Conversely, if the bulls regain control, notable support to the upside comes in the form of the previous weekly lows at just above $23.20, as well the 21 and 50-day moving averages at $24.34 and $24.56.
XAG/USD four hour chart
