Silver price (XAG/USD) was hit with some strong selling after the fall in the Turkish Lira sparked a risk-averse environment in the global markets. The situation favored the greenback at the expense of the non-yielding commodities.
The sharp drop in the XAG/USD has violated the bearish pennant on the daily chart, setting up the potential for a further drop towards the $24 price mark. This outlook is reinforced by several outlook pieces provided by institutional players, with Nordea bank also predicting that the greenback could rise 20% year-on-year, citing the “hands-off” approach of the Fed towards long-term bond yields.
Technical Levels to Watch
The breakdown of the pennant is the key picture on the daily chart of silver price action. The breakdown move hit support at the 25.386 price level, with a slight pullback to the upside. This pullback could test the pennant’s lower border, where a rejection reinforces the breakdown move. At that juncture, the silver price bears must take out the 25.386 support, to take the price towards 24.569. A further decline brings silver price to the projected point of the measured move, situated at 23.966.
On the other hand, if bulls can extend the price above 26.034, this negates the bearish pennant and opens the door towards the 26.325 resistance barrier. Above this level, 26.868 and 27.502 line up as potential targets to the north.
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Silver Price Daily Chart
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