XAG/USD holds steady above mid-$22.00s, bearish bias remains

Silver attracted some buying on Friday, albeit lacked any follow-through buying.
The set-up favours bearish traders and supports prospects for additional losses.
A sustained break below the $22.50-45 area is needed to reaffirm the negative bias.

Silver regained positive traction on Friday and reversed the previous day’s modest losses, albeit lacked strong follow-through buying. The commodity held on to its gains through the first half of the European session and was last seen trading around the $22.65 region, up over 0.60% for the day.

From a technical perspective, the post-FOMC bullish spike on Wednesday struggled to find acceptance above the $23.00 round-figure mark. The subsequent pullback from the $23.15 region constitutes the formation of a bearish double-top on hourly charts and supports prospects for further losses.

The negative outlook is reinforced by the fact that technical indicators on the daily chart are still holding deep in the bearish territory. Moreover, oscillators on the 4-hour chart – though have managed to recover from lower levels – have been struggling to gain any meaningful traction.

However, it will be prudent to wait for sustained weakness below the $22.50-45 horizontal support before positioning for any further depreciating move. The XAG/USD might then accelerate the slide back towards challenging YTD lows, around the $22.00 round-figure mark touched earlier this week.

On the flip side, any subsequent positive move might continue to confront stiff resistance near the $23.00 mark and remain capped near the $23.15 region. A sustained move beyond might trigger a short-covering move and lift the XAG/USD towards the $23.70 area en-route $24.00 mark.