Silver (XAGUSD) extended its downward move below the trendline of the up channel and closed below that line at 17.55. Today’s candle resumed lower and dipped to the intraday low of 17.37, but some bullish activity has since sent the candle higher and it looks set to challenge the violated channel trendline. A decisive close of this second candle below the channel is required to confirm a downside break.
At present levels, price is just below the 38.2% Fibonacci level of 17.62, which is also where the violated channel trendline intersects this point.
The new support lies at 17.33, which is also the site of August 14 highs as well as a cluster of previous lows in October. Further support lies at the 50% Fibonacci retracement level of 16.98. Price must close decisively below 17.33 before it can target 16.98. Further break of 16.98 makes 16.56 the next target (61.8% Fibonacci retracement).
On the flip side, price recovery that takes the candle back into the previously violated channel temporarily negates the downside move. This will now present 17.93 as the next upside target to be challenged (38.2% Fibonacci level). Above this level, $18.07 and 18.18 (Nov 4 high) will become the new upside targets.
Price moves on XAGUSD are primarily being dictated by risk sentiment at the moment. It is possible that news that produces risk-off sentiment (such as positive news about the signing of the Phase 1 deal from the US-China trade talks) could spur more selling on the pair. The absence of such news puts silver prices on bid.