Silver (XAG/USD) fell 2.1% on Thursday to trade near $73, putting bears within striking distance of the $71 swing low. A breakout would expose the long-term 0.618 Fibonacci retracement level at $69.
Meanwhile, the daily Relative Strength Index (RSI) is testing the upward trend line that has been guiding momentum since late March. Traders are now waiting to see whether buyers will defend the line or surrender to it.
Silver price is testing $71 support on the daily chart
The daily chart frames the setup clearly. Silver broke above the sharp downtrend line on May 7. The price retested it as support on May 8, 19, and 20. It is now approaching the trend line for the fourth test.
Stability at $71 would sustain the bullish recovery and keep the door open for a retest of resistance at $83. After this level, the 0.382 Fibonacci retracement at $89 becomes the next uptrend. goal.
Losing $71 changes the picture completely. The next major buyer interest is at the long-term 0.618 Fib level near $69. The market last saw this area during the February collapse to $63.
Confluence at $71 makes this level the most important on the chart. It combines the swing low, retest of the downtrend line, and the gateway to deeper Fibonacci support in one area.
The daily RSI is holding onto the uptrend line
The momentum image mirrors the price chart. On the daily time frame, the RSI is at 43. It is pressing directly against the uptrend line that has been guiding every decline since late March.
This trend line served as a starting point for pool Which lifted silver towards $86 in mid-May. A clear bounce from this level would keep the neutral to bullish combination intact.
However, a breakout would mark the first failure of the trend line in two months. Such a loss indicates that daily momentum has reversed, opening the door to deeper declines over the coming weeks.
The 43 area is also important because it limited the previous corrections in March and April. A third bounce from this area would extend the extended base for several months.
Right now, both bulls and bears are waiting for confirmation.
Action points on the 4-hour XAG/USD frame reach $71
The magnified view tends to decrease. The 4-hour XAG/USD chart shows that the Bollinger bands are expanding sharply as the price falls towards the $71 level. This expansion usually indicates strong directional conviction behind the move.
The last 4-hour candle closed at $73.16, with the lower band falling towards $72. This band matches almost perfectly with the latest Swinging a little.
The price has already broken below the middle range of the 4-hour frame on May 27. This move indicated a failure to consolidate around $76. Sellers have dominated every candle close since then.
The 4-hour RSI also fell to 36, deep into the bearish zone. Sellers will need to lose control above $76 for short-term momentum to be neutralized.
The overall pressure adds weight to the downward setup. Prospects for a June Fed rate cut have collapsed from 48% to below 8% after April’s hot CPI reading. This shift raised the dollar and put pressure on dollar-denominated metals.
Silver also lost its bid as a safe haven this week as oil prices fell due to the US-Iran negotiations. The move puts the focus back on industrial demand, which fell with weak manufacturing data.
The next move depends on which technical line will break first, the RSI uptrend line or the $71 horizontal line. floor.
this post Silver price fell to $73, with $71 support becoming crucial appeared first on BeInCrypto.
