Silver is currently trading lower on the day as tepid Chinese PMI data continue to weigh on commodities in Monday trading. XAGUSD is now trading at $17.13, and is dutifully approaching the key support level at $16.94.
However, the daily candle needs to close the day with a 3% penetration below the support formed by the highs of April 19, June 14 and August 14 to be able to touch off 16.94 successfully.
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Technical Outlook for Silver
The daily chart presents the near-term view for XAGUSD and shows that the present downside move is a pullback to the consolidation region that has 15.50 as the floor and 17.50 as the ceiling.
The immediate support lies at 16.94 and below this level, 16.28 (61.8% Fibonacci level of a trace from May 26 swing low to Sept 1 swing high). The 16.28 price level is also the site at which XAGUSD made its Q1/Q2 2018 lows. A break of immediate support at 16.94 will bring this level into focus.
On the flip side, a failed attempt to break 16.94 could reopen the door for another test of 17.60. A break above this level would invalidate further downside sentiment and the highs of Feb 2017 and August 25 would then be the next upside target.